Q2 2024 Graphic Packaging Holding Co Earnings Call

July 30, 2024

Greetings. Welcome to the Graphic Packaging Holding Company second quarter 2024 earnings call.

Melanie Skijus: Company's second quarter, 2024 earning school. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.

Unknown Executive: Company Second Quarter 2024 Earnings Clause. At this time, all participants are in a listen-only mode.

Speaker Change: At this time, all participants are in a listen-only mode.

Unknown Executive: A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Melanie Skijus. You may begin.

Speaker Change: A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

Operator: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

Operator: Please note this conference is being recorded.

Melanie Skijus: I will now turn the conference over to your host, Melanie Skijus. You may begin.

Speaker Change: Please note this conference is being recorded. I will now turn the conference over to your host, Melanie Skijus. You may begin.

Melanie Skijus: Good morning, and welcome to Graphic Packaging Holding Company's second quarter 2024 earnings call. Joining us on our call today are Mike Doss, a company's President and CEO, and Steve Scherger, Executive Vice President and CSO. To help you follow along with today's reports, we will be referencing our second quarter earnings presentation, which can be accessed through the webcast, and also in the investor's section of our presentation.

Melanie Skijus: Good morning, and welcome to Graphic Packaging Holding Company's second quarter 2024 earnings call. Joining us on our call today are Mike Doss, the company's President and CEO, and Steve Scherger, Executive Vice President and CFO. To help you follow along with today's report, we will be referencing our second quarter earnings presentation, which can be accessed through the webcast and also in the investor section of our website at www.graphicpkg.com. Before I turn the call over to Mike, let me remind you that today's press release and the presentations made by our executives include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.

Speaker Change: To help you follow along with today's report, we will be referencing our second quarter earnings presentation, which can be accessed through the webcast and also in the investor section of our website at www.graphicpkg.com.

Melanie Skijus: This is our website at www.graphicpkg.com. Before I turn the call over to Mike, let me remind you that today's press release and the presentations made by our executives include four looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subjects to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, the factors identified in the release and in our filings with the Securities and Exchange Commission.

Speaker Change: Before I turn the call over to Mike, let me remind you that today's press release and the presentations made by our executives include four looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties.

Melanie Skijus: Statements Are Subject To Risks, Concerned, which could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, the factors identified in the release and in our filings with the Securities and Exchange Commission. With that, let me turn the call over to Mike. Thank you, Melanie. Good morning, everyone.

Mike: that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, the factors identified in the release and in our filings with the Securities and Exchange Commission. With that, let me turn the call over to Mike.

Michael Doss: With that, let me turn the call over to Mike. Thank you, Melanie. Good morning, everyone, and thank you for joining us on our call today. Graphic Packaging is a global leader in sustainable consumer packaging. We spent the last eight years earning a stronger, more diverse packaging portfolio, capable of delivering consistent results. Solid world and substantial cash flow are also range of economic conditions. The benefits of that portfolio transformation and the commitment and talent of the Graphic Packaging team were clearly evident in our second quarter results. In the second quarter, Graphic Packaging sales were $2.2 billion, adjusted EBITDA with $402 million, and adjusted EPS with 60 cents.

Michael P. Doss: And thank you for joining us on our call today. Graphic Packaging is a global leader in sustainable consumer packaging. We spent the last eight years building a stronger, more diverse packaging portfolio capable of delivering consistent results, solid growth, and substantial cash flow across a range of economic conditions. The benefits of that portfolio transformation and the commitment and talent of the Graphic Packaging team were clearly evident in our second quarter results. In the second quarter, graphic packaging sales were $2.2 billion, adjusted EBITDA was $402 million, and adjusted EPS was $67 million.

Stephen R. Scherger: Thank you, Melanie. Good morning, everyone, and thank you for joining us on our call today.

Speaker Change: Graphic Packaging is a global leader in sustainable consumer packaging. We spent the last eight years building a stronger, more diverse packaging portfolio capable of delivering consistent results, solid growth, and substantial cash flow across a range of economic conditions.

Stephen R. Scherger: The benefits of that portfolio transformation and the commitment and talent of the Graphic Packaging team were clearly evident in our second quarter results.

Stephen R. Scherger: In the second quarter, graphic packaging sales were $2.2 billion, adjusted EBITDA was $402 million, and adjusted EPS was $0.60.

Michael Doss: Our reported sales were $155 million below year-go levels, excluding the impact of the adjusted investment and related bleached paperboard sales. Net sales from our packaging business were down $73 million, or about 3%. Overall, volumes are flat in line with our expectation of flat to slightly positive, and both price and mix where a small negative has stable disgust short. We ran extremely well in our margins for strong despite the very significant plan maintenance expense we incur during the quarter. That leads us well positioned for the second half. Innovation sales growth and customer promotion activity are both expected to move higher in the third and fourth quarters.

Michael P. Doss: Our reported sales were $155 million below year-ago levels, excluding the impact of the adjusted investment and related bleached paperboard sales. Net sales from our packaging business were down $73 million, or about 3%. Overall volumes are flat, in line with our expectation of flat to slightly positive, and both price and mix were small negative, as Steve will discuss shortly. We ran extremely well, and our margins were strong, despite the very significant planned maintenance expense we incurred during the quarter.

Stephen R. Scherger: Our reported sales were $155 million below year-ago levels. Excluding the impact of the Augusta divestiture and related bleached paperboard sales, net sales from our packaging business were down $73 million, or about 3%.

Stephen R. Scherger: Overall volumes are flat, in line with our expectation of flat to slightly positive, and both price and mix were small negative, as Steve will discuss shortly.

Steve: We ran extremely well, and our margins were strong despite the very significant planned maintenance expense we incurred during the quarter. That leaves us well positioned for the second half. Innovation sales growth and customer promotional activity are both expected to move higher in the third and fourth quarters.

Michael P. Doss: That leaves us well-positioned for the second half. Innovation sales growth and customer promotional activity are both expected to move higher in the third and fourth quarters. Turning to slide three, we closed on the sale of the Augusta Bleach Paperboard Manufacturing Facility on May 1st, eliminating most of our open market bleach paperboard sales.

Michael Doss: Turning to slide three, closed on the sale of the August of Bleached Paperboard Manufacturing Facility at May 1, eliminating most of our open market bleached paperboard sales. And today, 95% of our sales come from sustainable consumer packaging solutions. Excellence in consumer packaging design, innovation, and executions would prize our sales partner. and Consistency, and Art Groups. We do produce our own paperwork. We're doing so to drive significantly higher return on investment capital and helps us deliver more consistent results for customers and stockholders. That was the impetus for the Augusta Investiture and the strategic logic behind our Waco Recycle Paperboard Manufacturing Project.

Steve: Turning to slide 3, we closed on the sale of the Augusta Bleach paperboard manufacturing facility on May 1st, eliminating most of our open market bleach paperboard sales. And today, 95% of our sales come from sustainable consumer packaging solutions.

Michael P. Doss: And today, 95% of our sales come from sustainable consumer packaging solutions. Excellence in Consumer Packaging Design, Innovation, and Execution is what drives our sales, our development, and our group. We do produce our own paperwork, where doing so drives a significantly higher return on invested capital and helps us deliver more consistent results for customers and stockholders. That was the impetus for the Augusta divestiture and the strategic logic behind our Waco recycled paperboard manufacturing project. Construction progress at Waco has been, and recent storm activity in Texas caused very little disruption.

Steve: Excellence in Consumer Packaging Design, Innovation, and Execution is what drives our sales are consistent.

Steve: and Art Rules.

Steve: We do produce our own paperwork, where doing so drives significantly higher return on invested capital and helps us deliver more consistent results for customers and stockholders.

Steve: That was the impetus for the Augusta divestiture and the strategic logic behind our Waco recycled paperboard manufacturing project.

Michael Doss: Construction progress at Waco has been excellent. In recent storm activity in Texas, cost very little disruption. We remain on schedule, and when we begin production in late 2025, we will extend our competitive advantage we have in recycled paperboard in both economics and product quality across all North America. The investments we are making in our global network of packaging facilities, both smaller in dollar terms, are equally important to our strategy and our success. That's where we highlighted the new beverage packaging facility and innovations that are in the UK.

Steve: Construction progress at Waco has been excellent, and recent storm activity in Texas caused very little disruption.

Michael P. Doss: We remain on schedule, and when we begin production in late 2025, we will extend our competitive advantage we have in recycled paperboard in both economics and product quality for us all. The investments we are making in our global network of packaging facilities, both smaller in dollar terms, are equally important to our strategy and our success. Last quarter, we highlighted a new beverage packaging facility and innovation center in the UK. And today, I want to highlight two important investments we've made here in North America.

Steve: We remain on schedule, and when we begin production in late 2025, we will extend our competitive advantage we have in recycled paperboard in both economics and product quality across all North America.

Steve: The investments we are making in our global network of packaging facilities, while smaller in dollar terms, are equally important to our strategy and our success.

Steve: Last quarter we highlighted the new beverage packaging facility and innovation center in the UK, and today I want to highlight two important investments we've made here in North America.

Michael Doss: Today, I want to highlight two important investments we've made here in North America. Our title Bird 3B printing press, one of the most productive in the world, reached its target productivity at our Winnipeg Food Packaging Facility in the second quarter. This day-to-the-art press replaces two older presses and allows us to offer seven colors for finishes rather than six, along with a wider range of print and design options. It also gives us greater flexibility in layout and higher speeds, which reduces costs and raises productivity. I am very proud of the work our Winnipeg team has done bringing this new investment to its full potential so quickly.

Michael P. Doss: The Heidelberg 3B Printing Press, one of the most productive in the world, reached its target productivity at our Winnipeg food packaging facility in the second quarter. This state-of-the-art press replaces two older presses and allows us to offer seven colors or finishes rather than six, along with a wider range of print and design options.

Steve: Our Heidelberg 3B printing press, one of the most productive in the world, reached its target productivity at our Winnipeg food packaging facility in the second quarter.

Steve: This state-of-the-art press replaces two older presses and allows us to offer 7 colors or finishes rather than 6, along with a wider range of print and design options.

Michael P. Doss: It also gives us greater flexibility in layouts and higher speeds, which reduces costs and raises productivity. I am very proud of the work our Winnipeg team has done to bring this new investment to its full potential so quickly. In Perry, Georgia, we completed the automation of finished goods handling at one of our largest beverage packaging facilities. Product handling in a packaging plant has historically been labor-intensive and is the point in the manufacturing process where there is the greatest risk of product damage.

Speaker Change: It also gives us greater flexibility in layouts and higher speeds, which reduces costs and raises productivity. I am very proud of the work our Winnipeg team has done bringing this new investment to its full potential so quickly.

Michael Doss: In very Georgia, we completed the automation of finished goods handling at one of our largest beverage packaging facilities. Product handling in a packaging plant has historically been labor intensive and is the point in the manufacturing process where there is the greatest risk of product damage. The automation projects help us to be bottlenecked, reduce labor costs, and handling risks and drive improved service levels. We have a deep pipeline of projects like these, most of which are relatively low capital costs and high returns. Turning to our packaging results. While volumes are recovering slowly overall, I am encouraged by what is happening inside our portfolio.

Speaker Change: In Perry, Georgia, we completed the automation of finished goods handling at one of our largest beverage packaging facilities.

Speaker Change: Product handling in a packaging plant has historically been labor-intensive and is the point in the manufacturing process where there is the greatest risk of product damage. The automation project helped us debottleneck, reduce labor costs and handling risks, and drive improved service levels.

Michael P. Doss: The automation project helped us debottleneck, reduce labor costs and handling risks, and drive improved service levels. We have a deep pipeline of projects like these, most of which are relatively low capital costs and high impact on our packaging results. While volumes are recovering slowly overall, I am encouraged by what is happening inside our portfolio. Our food service results are outperforming the industry, beverage remains strong, and food, our largest market, was dramatically better year over year than it was in the first quarter. As you read in the press, more shoppers are buying groceries at mass retailers and super stores.

Speaker Change: We have a deep pipeline of projects like these, most of which are relatively low capital costs and high returns.

Speaker Change: Turning to our packaging results, while volumes are recovering slowly overall, I am encouraged by what is happening inside our portfolio. Our food service results are outperforming the industry, beverage remains strong, and our food, our largest market, was dramatically better year over year than it was in the first quarter.

Michael Doss: Our food service results are out of the form in the industry; beverage remains strong, and our food, our largest market, was dramatically better year over year than it was in the first quarter. As you read in the press, our shoppers are buying groceries at mass retailers and superstores, and that includes both private label and branded products. We are certainly participating in that shift. Mass retailers and superstores are just as committed as brand owners to giving consumers the sustainable packaging they prefer. The Boreo Coffee canister we discussed last quarter with Mother Parker, the biggest US coffee supplier to mass retail and private label.

Michael P. Doss: And that includes both private label and branded products. We're certainly participating in that shift. Mass retailers and super stores are just as committed as brand owners to giving consumers the sustainable packaging they prefer.

Speaker Change: As you read in the press, more shoppers are buying groceries at mass retailers and super stores, and that includes both private label and branded products.

Speaker Change: We are certainly participating in that shift. Mass retailers and super stores are just as committed as brand owners to giving consumers the sustainable packaging they prefer.

Michael P. Doss: The Bordeaux Coffee Canister we discussed last quarter with Mother Parker, the biggest U.S. coffee supplier to mass retail and private label, is a good example of that commitment. Innovation sales growth was $51 million in the quarter, and we are on track to deliver $200 million for the full year. I was particularly pleased to see solid contributions from strength packaging, including coffee, k-cup, and snack multi packs for club stores. And we again saw encouraging contributions from both food and beverage companies.

Speaker Change: The Bordeaux coffee canister we discussed last quarter with Mother Parker, the biggest U.S. coffee supplier to mass retail and private label, is a good example of that commitment.

Michael Doss: This is a good example of that commitment. Innovation sales growth was 51 million dollars in the quarter, and we were on track to deliver 200 million dollars for the full year. I was particularly pleased to see solid contributions from strength packaging, including coffee, cake, cup, snack, multi-packs for club stores. And we again saw encouraging contributions from both food and beverage cups.

Speaker Change: Innovation sales growth was $51 million in the quarter, and we are on track to deliver $200 million for the full year. I was particularly pleased to see solid contributions from strength packaging, including coffee, k-cup, and snack multi-packs for club stores.

Speaker Change: And we again saw encouraging contributions from both food and beverage cups.

Michael Doss: House. Europe is less than a quarter of our overall sales, but contributed roughly half of our innovation sales growth in the quarter. European consumers are amongst the most insanely conscious in the world, and that has made Europe the epicenter of global packaging innovation. Our investment to build Europe's best innovation platform is delivering results that we are leveraging globally. Our packaging operations ran well, and some modest price and inflation headwinds were fully offset by strong net performance. As a testament to the quality of the Graphic Packaging team, and our commitment to delivering consistent results. Slide 4 is something you're going to see regularly in our presentations because the breadth and depth of our packaging portfolio is the foundation of Graphic Packaging's consistent seed growth.

Michael P. Doss: Europe accounts for less than a quarter of our overall sales but contributed roughly half our innovation sales growth in the quarter. European consumers are amongst the most sustainably conscious in the world, and that has made Europe the epicenter of global packaging innovation.

Speaker Change: Europe has less than a quarter of our overall sales but contributed roughly half our innovation sales growth in the quarter. European consumers are amongst the most sustainably conscious in the world and that has made Europe the epicenter of global packaging innovation.

Michael P. Doss: Our investment to build Europe's best innovation platform is delivering results that we are leveraging globally. Our packaging operations ran well, and some modest price and inflation headwinds were fully offset by strong net performance. That is a testament to the quality of the graphic packaging team and our commitment to delivering consistent results.

Speaker Change: Our investment to build Europe's best innovation platform are delivering results that we are leveraging globally.

Speaker Change: Our packaging operations ran well, and some modest price and inflation headwinds were fully offset by strong net performance. That is a testament to the quality of the graphic packaging team and our commitment to delivering consistent results.

Michael P. Doss: Slide 4 is something you're going to see regularly in our presentations, because the breadth and depth of our packaging portfolio is the foundation for graphic packaging's consistency and growth. We serve five markets, food is the largest, beverage and food service are next, and we see big opportunities to grow the scale of both household products and health and beauty. There's a very good chance that you have held more than one of our products in your hands in the past 24 hours and will do so again in the next 24.

Speaker Change: Slide 4 is something you're going to see regularly in our presentations, because the breadth and depth of our packaging portfolio is the foundation for graphic packaging's consistency and growth.

Michael Doss: We serve five markets; food is the largest, beverage and food service are next, and we see big opportunities to grow the scale of both household products and health and beauty. There's a very good chance that you have held more than one of our products in your hands in the past 24 hours, and we'll do so again in the next 24. Now let's look at our sales or detail on slide 5. I think it's fair to say it, sumer, substance trends you're reading about, we see in our results. Food markets, which represent 40% of our sales, saw a significantly smaller year-over-year decline.

Speaker Change: We serve five markets, food is the largest, beverage and food service are next, and we see big opportunities to grow the scale of both household products and health and beauty.

Speaker Change: There's a very good chance that you have held more than one of our products in your hands in the past 24 hours, and will do so again in the next 24.

Michael P. Doss: Now let's look at the details of our sales report on slide five. I think it's fair to say the consumer consumption trends you're reading about are what we see in our results. Food markets, which represent 40% of our sales, saw a significantly smaller year-over-year decline, with more people back in the office. Consumers have less time to cook, and that is driving the better results we are seeing in categories like frozen pizza and frozen entrees. But consumers are also trying to cut costs where they do cook, which is driving better demand for pasta, rice, mac and cheese, which have lower price points for the consumer.

Speaker Change: Now let's look at our sales report detail on slide 5. I think it's fair to say that the consumer consumption trends you're reading about, we see in our results.

Speaker Change: Food markets, which represent 40% of our sales, saw a significantly smaller year-over-year decline. With more people back in the office, consumers have less time to cook, and that is driving the better results we are seeing in categories like frozen pizza and frozen entrees.

Michael Doss: With more people back in the office, consumers have less time to cook, and that is driving the better results we're seeing in categories like frozen pizza and frozen entrees. But consumers are also trying to cut costs where they do cook, which is driving better demand for pasta, rice, mac and cheese, which have lower price points for the consumer. Dry food is one of the places where private label is gaining share, and that is certainly the case in our portfolio as well. Beverage continues to show strong performance after more than two years of positive comparisons. Soft drink, growth, health, pace, beer during the quarter, plus sparkling water and juice with both stronger versus a year ago.

Michael P. Doss: Dry food is one of the places where private labor is gaining share, and that is certainly the case in our portfolio as well; beverage continues to show strong performance after more than two years of positive comparison.

Michael P. Doss: Soft drink growth outpaced beer during the quarter, while sparkling water and juice were both stronger versus a year ago. At Food Service, after nine consecutive quarters of 5% plus year over year growth, we did see a very modest slowdown. But despite the challenges some of our QSR customers are facing, we actually came pretty close to our 10th consecutive 5% plus quarter. That is a function of the strength of our innovation and our continued investment capabilities and execution. And finally, household products and health and beauty are recovering more slowly versus our other markets, and in household, categories like filter frames, food storage, and detergents showed improvement, while tissue and cleansers remained relatively weak.

Speaker Change: Soft drink growth outpaced beer during the quarter, while sparkling water and juice were both stronger versus a year ago.

Michael Doss: And food service after night, second quarter is a 5% plus year-over-year growth. We did say very much slow down, but despite the challenges some of our QSR customers are facing, we actually came pretty close to our 10th consecutive 5% plus quarter. That is a function of the strength of our innovation and our continued investment capabilities and execution. And finally, household products and health and beauty are recovering more slowly versus our other markets. And household categories like filter frames, whose storage and detergents, shield improvement, while tissue and cleansers remain relatively weak. Several major producers have indicated plans for higher promotional activity in the second half.

Speaker Change: We actually came pretty close to our 10th consecutive 5% plus quarter. That is a function of the strength of our innovation and our continued investment in capabilities and execution.

Speaker Change: And finally, household products in health and beauty are recovering more slowly versus our other markets.

Speaker Change: In household, categories like filter frames, food storage, and detergents showed improvement, while tissue and cleansers remained relatively weak.

Michael P. Doss: Several major producers have indicated plans for higher promotional activity in the second half. But keep in mind that health and beauty is a small business for us, but it has substantial growth potential in North America over the next several years. If you'll turn to me on slide six, you'll see the seasonality chart on the left we shared with you last quarter, which describes the typical seasonal patterns for each of our five markets.

Speaker Change: Several major producers have indicated plans for higher promotional activity in the second half. Keep in mind that health and beauty is a small business for us, but it has substantial growth potential in North America over the next several years.

Michael Doss: Keep in mind that health and beauty is a small business for us, but it has substantial growth potential in North America over the next several years.

Michael Doss: If you'll try to meet this line 6, you'll see the seasonality chart on the left. We shared with you last quarter, which describes the typical season of patterns for each of our five markets. For the most part, second quarter tends to be pretty average overall, with food normally honestly lower than the other quarters and beverage stronger, and no other notable outlets. These seasonal differences are not large, just a couple percent of the annual total. They reflect underlikes and behavior patterns that follow things like summer and winter weather and holiday it. You will notice that none of our unusually strong or weak months come in the second quarter, but you may recall this past March, which is typically the strongest month of the first quarter, was weaker for us because of the timing of Easter.

Speaker Change: If you'll turn to me to slide six, you'll see the seasonality chart on the left we shared with you last quarter, which describes the typical seasonal patterns for each of our five markets.

Michael P. Doss: For the most part, second quarter tends to be pretty average overall, with food normally modestly lower than the other quarters, and beverage sales stronger, and no other notable outliers. These seasonal differences are not large, just a couple of percent of the annual total. They reflect underlying behavior patterns that follow things like summer and winter weather and holidays.

Speaker Change: For the most part, second quarter tends to be pretty average overall, with food normally modestly lower than the other quarters, and beverage stronger, and no other notable outliers.

Speaker Change: These seasonal differences are not large, just a couple percent of the annual total. They reflect underlying behavior patterns that follow things like summer and winter weather and holiday activities.

Michael P. Doss: You will notice that none of our unusually strong or weak months come in the second quarter, but you may recall this past March, which is typically the strongest month of the first quarter, was weaker for us because of the timing of Easter. That led to a catch-up in April, so that was the small timing difference this year versus normal. While overall consumer packaging volume was flat, we saw volume improvement in Europe in each month of the second quarter, while North America volumes were uneven.

Speaker Change: You will notice that none of our unusually strong or weak months come in the second quarter, but you may recall this past March.

Speaker Change: which is typically the strongest month of the first quarter, was weaker for us because of the timing of Easter. That led to a catch-up in April , so that was the small timing difference this year versus normal.

Michael Doss: That led to a catch up in April, so that was a small time in difference this year versus normal. While overall consumer packaging volume is flat, we sell volume improvement in Europe in each month of the second quarter, while North America volumes weren't even. You most often hear me talk about the benefits of our European business in terms of innovation, but this quarter is a good reminder that Europe makes a significant contribution to our ability to deliver consistency as well. Promotional activity by our big branded customers is ramping up in North America, although that trend is not as pronounced in our orders during the second quarter as we expected will be in the second half.

Speaker Change: While overall consumer packaging volume was flat,

Speaker Change: We saw volume improvement in Europe in each month of the second quarter, while North America volumes were uneven.

Michael P. Doss: You most often hear me talk about the benefits of our European business in terms of innovation, but this quarter is a good reminder that Europe makes a significant contribution to our ability to deliver consistency as well. Promotional activity by our big branded customers is ramping up in North America, although that trend was not as pronounced in our orders during the second quarter as we expect it will be in the second half. I've already mentioned the strength in the mass retail superstore channels we are seeing, and private label, overall, is certainly performing very well.

Speaker Change: Promotional activity by our big branded customers is ramping up in North America, although that trend not as pronounced in our orders during the second quarter as we expect it will be in the second half.

Michael Doss: I have already mentioned strength and mass retail, superstar channels we are seeing, and private label overall is certainly performing very well. We are managing some pricing headwinds, but the impact on our margins has been quite limited, as people discuss. We are executing price increases across most of North American business, which will address that price pressure. In Europe, prices mostly have passed through, and paper board prices appear to be rising again. Looking ahead, the third quarter brings more pop weather and back to school. And as you can see on the seasonality chart in a typical year, the third quarter tends to be the strongest quarter overall.

Michael P. Doss: We are managing some pricing headwinds, but the impact on our margins has been quite limited, as Steve will discuss. We are executing price increases across most of our North American business, which will address that price. In Europe, prices mostly have passed through, and paperboard prices appear to be rising. Looking ahead, the third quarter brings more hot weather than back to school, and as you can see on the seasonality chart, in a typical year, the third quarter tends to be the strongest quarter overall.

Speaker Change: We are managing some pricing headwinds, but the impact on our margins has been quite limited, as Steve will discuss.

Steve: We are executing price increases across most of our North American business.

Steve: which will address that price pressure.

Steve: In Europe , prices mostly have passed through and paperboard prices appear to be rising again.

Steve: Looking ahead, the third quarter brings more hot weather than back to school, and as you can see on the seasonality chart, in a typical year, third quarter tends to be the strongest quarter overall.

Michael Doss: And July is certainly often an encouraging start across a wide range of products and customers. Even so, consumers have become much more sensitive to price and value, and brand owners are responding with plans for higher promotional activity. Meanwhile, value promotions are gaining traction in QSRs, and we are beginning to see that in our other books. Mass retail and superstores are benefiting from the search for better value with multi-packs that appeal to consumers seeking to keep per unit cost down. Back to school means the end of vacation season, plus time spent outdoors and, in general, more meals prepared at home.

Michael P. Doss: And July is certainly off to an encouraging start across a wide range of products and customers. Even so, consumers have become much more sensitive to price and value, and brand owners are responding with plans for higher promotional activity. Meanwhile, Value Promotions are gaining traction at QSRs, and we are beginning to see that in our order book. Mass retail and super stores are benefiting from the search for better value with multi-packs that appeal to consumers seeking to keep per unit costs down. Back to school means the end of vacation. Less time spent outdoors, and, in general, more meals prepared at home.

Steve: And July is certainly off to an encouraging start across a wide range of products and customers.

Steve: Mass retail and super stores are benefiting from the search for better value with multi-packs that appeal to consumers seeking to keep per unit costs down.

Steve: Back to school means the end of vacation season, less time spent outdoors, and in general, more meals prepared at home. So we expect to see a positive impact on categories like prepared foods and snacks.

Michael Doss: So we expect to see a positive impact on categories like prepared foods and snacks. At the same time, fewer remote jobs means less time to cook, and that tends to provide growth and food service, bare meals, and ready-to-eat options. We are seeing that in a meaningful way in our European convenience business today, and expect to see it again, strength in North America in the second half.

Michael P. Doss: So we expect to see a positive impact on categories like prepared foods and snacks. At the same time, fewer remote jobs mean less time to cook, and that tends to drive growth in food service, prepared meals, and ready-to-eat options. We are seeing that in a meaningful way in our European convenience business today and expect to see it gain strength in North America in the second half. Slide 7 outlines our 5 innovation platforms, which we are seeing very strong engagement with customers across all of them. Some of you have asked whether the destocking we saw last year has led to any delays in new product launches. In general, we aren't seeing that.

Speaker Change: At the same time, fewer remote jobs means less time to cook, and that tends to drive growth in food service, prepared meals, and ready-to-eat options.

Speaker Change: We are seeing that in a meaningful way in our European convenience business today and expect to see it gain strength in North America in the second half.

Michael Doss: Slide 7 outlines are five innovation platforms, which we are seeing very strong engagement with customers across all of them. Some of you have asked whether the destocking we saw last year has led to any delays to new product launches. In general, we aren't seeing that. Customers do sometimes just timing and pace of their launches in response to market conditions, but we tend to have good visibility at least six to nine months out. As a reminder, the 15 billion of potential sales we identified here only includes opportunities where we already have product solutions that have been commercialized, or will be commercial very soon.

Speaker Change: Slide 7 outlines our five innovation platforms, which we are seeing very strong engagement with customers across all of them.

Speaker Change: Some of you have asked whether the destocking we saw last year has led to any delays in new product launches. In general, we aren't seeing that. Customers do sometimes adjust timing and pace of their launches in response to market conditions, but we tend to have good visibility at least six to nine months out.

Michael P. Doss: Customers do sometimes adjust timing and pace of their launches in response to market conditions, but we tend to have good visibility at least six to nine months out. As a reminder, the 15 billion of potential sales we identified here only includes opportunities where we already have a product solution that has been commercialized or will be commercial very soon. So it isn't a TAM in the traditional top-down sense. These are figures we built based on specific target markets and specific plans we already have in place. Most of our large customers have made commitments about the sustainability of the package. In Europe, many tell us they want to meet the new standards earlier than they were required to.

Speaker Change: As a reminder, the $15 billion of potential sales we identified here only includes opportunities where we already have a product solution that has been commercialized or will be commercial very soon.

Michael Doss: So it isn't a tab in the traditional top-down set. These are figures we build based on specific target markets and specific plans we already have in place. Most of our large customers have made commitments about the sustainability of the packaging. In Europe, many tell us they want to meet the new standards earlier than they were required to. Our customers' interest in and commitment to packaging that is more circular, more functional, and more convenient continues to rise. And the investments we have made to be the global innovation leader in sustainability. And we'll consume our packaging are paying off.

Speaker Change: So it isn't a TAM in the traditional top-down sense.

Speaker Change: These are figures we built based on specific target markets and specific plans we already have in place.

Speaker Change: Most of our large customers have made commitments about the sustainability of their packaging.

Speaker Change: In Europe , many tell us they want to meet the new standards earlier than they were required to.

Michael P. Doss: Our customers' interest in, and commitment to, packaging that is more circular, more functional, and more convenient continues to rise, and the investments we have made to be the global innovation leader in sustainable consumer packaging are paying off. Last quarter, I highlighted our Bordeaux paperboard canister, which is now helping to reduce plastic consumption in the U.S. coffee market. Today I want to highlight another innovation that originated in our European business. Paper Seal Shape on Slide 8. Paper Seal was developed in collaboration with our partner, G. Mondini, as a replacement for plastic bowls, trays, and other difficult-to-recycle products.

Speaker Change: Our customers' interest in...

Speaker Change: and commitment to packaging that is more circular, more functional, and more convenient continues to rise. And the investments we have made to be the global innovation leader in sustainable consumer packaging are paying off.

Michael Doss: Best quarter I highlighted our 40 old paperboard canister, which is now helping to reduce plastic suction in the US coffee market.

Speaker Change: Last quarter, I highlighted our Bordeaux paperboard canister, which is now helping to reduce plastic consumption in the U.S. coffee market.

Michael Doss: Today I want to highlight another innovation that originated in our European business. Paper seal shape on slide 8. Paper Seal was developed in collaboration with our partner, Jimundini, as a replacement for plastic bowls, trays, and other difficulty recycled products. Paper Seal started out with rectangular trays. A paper seal shape allows us to offer a much wider range of shapes and sizes, including the eight sides also boy see on the left side of the slide. Paper Seal Shape can also be configured with multiple departments to hold gifts and crackers, for example. The paper seal product line offers outstanding barrier properties and extended shelf life relative to some plastic alternatives that ultimately reduces both cost and waste.

Speaker Change: Today I want to highlight another innovation that originated in our European business, paper seal shape, on slide 8.

Speaker Change: Paper Seal was developed in collaboration with our partner, G. Mondini, as a replacement for plastic bowls, trays, and other difficult-to-recycle products.

Michael P. Doss: Paper Seal started out with rectangular trays, but the rectangular shape allows us to offer a much wider range of shapes and sizes, including the eight-sided salsa bowl you see on the left side of the slide. The paper seal sheet can also be configured with multiple compartments to hold Dips and Crackers, for example. The Paper Seal product line offers outstanding barrier properties and extended shelf life relative to some plastic alternatives, which ultimately reduces both cost and waste.

Speaker Change: PaperSeal started out with rectangular trays, but PaperSeal Shape allows us to offer a much wider range of shapes and sizes, including the 8-sided salsa bowl you see on the left side of the slide.

Speaker Change: Paper Seal Sheet can also be configured with multiple compartments.

Speaker Change: to hold Pips and Crackers, for example.

Speaker Change: The paper-sealed product line offers outstanding barrier properties and extended shelf life relative to some plastic alternatives that ultimately reduces both cost and waste. It also offers outstanding printability that makes brand messaging really stand out.

Michael Doss: It also offers outstanding printability that makes brand messaging really stand out. Our first paper seal shape customer in the United Kingdom is St. Mary's, one of the UK's top food retailers for the private label bread and chicken line. We in Mundini have been working closely with St. Mary and Boy Park, one of Europe's top co-packers. Our trays were designed to run on Boy Park's existing lines, which also handle plastic trays for other customers. Our ability to run on existing lines about expensive modifications is an important and often complex aspect of your product commercialization. Paper Seal reduces plastic content and a tray or bowl by over 70%.

Michael P. Doss: It also offers outstanding printability that makes brand messaging really stand out. Our first paper seal shape customer in the United Kingdom is Sainsbury's, one of the UK's top food retailers, for their private label Bread and Chicken. We and Mondini have been working closely with Sainsbury's and Moy Park, one of Europe's top co-packers. Our trays were designed to run on Moy Park's existing lines, which also handle plastic trays for other customers. Our ability to run on existing lines without expensive modifications is an important and often complex aspect of new product commercialization. PaperSeal reduces plastic content in a tray or bowl by over 70%, and the lid and liner separate easily from the paperboard for recycling, which is especially important for European recycling programs.

Speaker Change: Our first paper seal shape customer in the United Kingdom is Sainsbury's, one of UK's top food retailers, for their private label bread and chicken line.

Speaker Change: We and Mondini have been working closely with Sainsbury's and Moy Park, one of Europe's top co-founders.

Speaker Change: Our trays were designed to run on Moy Park's existing lines, which also handle plastic trays for other customers. Our ability to run on existing lines without expensive modifications is an important and often complex aspect of new product commercialization.

Speaker Change: PaperSeal reduces plastic content in a tray or bowl by over 70%.

Michael Doss: And the lid and liner separate easily from the paper board for recycling, which is especially important for European recycling programs. This one implementation will reduce plastic consumption by about 300 metric tons per year, making it a win for St. Mary, a win for UK consumers, a win for graphic packaging, Mundini and Boy Park, and importantly a win for the planet. Paper seal shape exemplifies our success in creating packaging solutions that are more circular, more functional, and more convenient.

Speaker Change: and the lid and liner separate easily from the paperboard for recycling.

Speaker Change: which is especially important for European recycling programs. This one implementation will reduce plastic consumption by about 300 metric tons per year, making it a win for Sainsbury's, a win for UK consumers,

Michael P. Doss: This one implementation will reduce plastic consumption by about 300 metric tons per year, making it a win for Sainsbury's, a win for UK consumers, a win for Graphic Packaging, Madini, and Moy Park, and importantly, a win for the planet. Paper Seal Shape exemplifies our success in creating packaging solutions that are more circular, more functional, and more convenient. Finally, and before I turn it over to Steve, I want to take a moment to remind you that our Vision 2030 is much more than just a set of financial targets.

Speaker Change: a win for Graphic Packaging, Modini, and Moy Park, and importantly, a win for the planet.

Speaker Change: Paper Seal Shape exemplifies our success in creating packaging solutions that are more circular, more functional, and more convenient.

Michael Doss: Finally, and before I turn it over to Steve, I want to take a moment to remind you that our Vision 2030 is much more than just set up financial targets. Slide 9 lays out our four pillars of our strategy, which describe our goals and our aspirations. Innovation is at the heart of what we do because better, more sustainable packaging is what our customers are asking for and what consumers prefer. We have an exceptional team, and we work relentlessly to make even stronger. We have clear plans, not just... Targets. We're reducing our environmental footprint, and our packaging innovations help our customers meet their own sustainability targets.

Speaker Change: Finally, and before I turn it over to Steve, I want to take a moment to remind you that our Vision 2030 is much more than just a set of financial targets. Slide 9 lays out our four pillars of our strategy which describe our goals and our aspirations.

Michael P. Doss: Slide 9 lays out our four pillars of our strategy, which describe our goals and our aspirations. Innovation is at the heart of what we do, because better, more sustainable packaging is what our customers are asking for and what consumers prefer.

Steve: Innovation is at the heart of what we do, because better, more sustainable packaging is what our customers are asking for and what consumers prefer.

Michael P. Doss: And we have been working relentlessly to make it even stronger. We have clear plans, not just for reducing our environmental footprint, and our packaging innovations help our customers meet their own sustainability targets. We know how to execute and measure our performance against clear goals and aspirations. We are delivering results. Now, let me turn it over to Steve for a review of our financials and operations.

Steve: We have an exceptional team.

Steve: And we are working relentlessly to make it even stronger. We have clear plans, not just targets.

Speaker Change: for reducing our environmental footprint and our packaging innovations help our customers meet their own sustainability targets.

Michael Doss: We know how to execute and measure our performance against clear goals and aspirations. We are delivering results.

Speaker Change: We know how to execute and measure our performance against clear goals and aspirations. We are delivering results. Now let me turn it over to Steve for a review of our financials and operations.

Stephen Scherger: Now let me turn it over to Steve for review of our financials and operations. Steve. Thank you, Mike. Turning to slide 10. In the second quarter, we executed very well. Generating strong margins and just an event up just as we did in the first quarter. Our reported sales were down $125 million. More than half of that decline represented the impact of the Augusta de Vessager and the dramatic reduction in our participation in bleached paperboard sales. Sales from our packaging business were down approximately $73 million. Inline with the expectations we shared last quarter. Price was a small headwind of about 2%, and there was a minor negative mixed impact of about 1% in our European business.

Stephen R. Scherger: Turning to slide 10, in the second quarter, we executed very well, generating strong margins and Adjusted Even Dough, as we did in the first quarter. However, reported sales were down $155 million. More than half of that decline represented the impact of the Augusta divestiture and the dramatic reduction in our participation in bleached paperboard sales. Sales from our packaging business were down approximately $73 million.

Speaker Change: Steve.

Steve: Thank you, Mike.

Steve: Turning to slide 10.

Steve: In the second quarter, we executed very well, generating strong margins and adjusted EBITDA.

Steve: Just as we did in the first quarter.

Steve: All reported sales were down $125 million.

Steve: More than half of that decline represented the impact of the Augusta divestiture and the dramatic reduction in our participation in bleached paperboard sales.

Steve: Sales from our packaging business were down approximately $73 million.

Stephen R. Scherger: Volume was flat, in line with the expectations we shared last quarter. Price was a small headwind, about 2%. And there was a minor negative mixed impact of about 1% in our European business. As you will recall, our European business has a significant and profitable health and beauty segment, where the unit price tends to be quite a bit higher than our average. However, this is also true in parts of our European household products business, both of which were weaker in the second quarter.

Steve: Volume was flat, in line with the expectations we shared last quarter.

Steve: Price was a small headwind, about 2%, and there was a minor negative mixed impact of about 1% in our European business.

Stephen Scherger: As you will recall, our European business has a significant and profitable health and beauty segment. The unit price tends to be quite a bit higher than our average, however, which is also true in parts of our European household products business, both of which were weaker in the second quarter. As such, the decline in high price region and sales drove some negative mix. Mix was not a meaningful factor in the first quarter of Europe, and it was not a significant factor in our America's results in either quarter. Keep in mind that our European business operates mainly on a price passed through month, so the mixed impact we saw in second quarter sales did not have a material impact on EBITDA or margins.

Steve: As you will recall, our European business has a significant and profitable health and beauty segment.

Steve: The unit price tends to be quite a bit higher than our average, however, which is also true in parts of our European household products business.

Steve: Both of which were weaker in the second quarter.

Stephen R. Scherger: As such, the decline in high price per unit sales drove some negative mix. However, mix was not a meaningful factor in the first quarter in Europe, and it was not a significant factor in our America's results in either quarter.

Steve: As such, the decline in high price per unit sales drove some negative mix.

Steve: Mix was not a meaningful factor in the first quarter in Europe , and it was not a significant factor in our America's results in either quarter.

Stephen R. Scherger: Keep in mind that our European business operates mainly on a price pass-through model. So the mixed impact we saw in second quarter sales did not have a material impact on EBITDA or margins, based on other evidence. Good evening, y'all, and Foreign Exchange was basically a wash. Graphic Packaging delivered to Justity Vida $402,000,000, in line with our guide. The $47,051,000,000 decline in reported adjusted EBITDA was due to the Augusta domestic, the Related Impact of Lower Paperboard Volumes and Prices, and the incremental planned maintenance expense that we called out last quarter, which together came in broadly as expected.

Steve: Keep in mind that our European business operates mainly on a price pass-through model, so the mixed impact we saw in second quarter sales did not have a material impact on EBITDA or margins.

Stephen Scherger: Sales impact from other revenue, excluding Augusta and for an exchange, was basically a wash. Grab a packaging delivered at just an EBITDA of $402 million, in line with our guidance. $47 million, $51 million of the client and reported at just an EBITDA was due to the Augusta semester, the related impact of lower paperboard volumes and prices, and incremental planned maintenance expense that we called out last quarter. Which together came in broadly as expected. Excluding those items, an EBITDA headwind for lower sales, which was primarily price and some modest cost inflation, was fully offset by solid and performance.

Steve: [inaudible]

Steve: excluding Augusta, and foreign exchange was basically a wash.

Steve: Graphic Packaging delivered adjusted EBITDA of $402,000,000 in line with our guidance.

Steve: $47,051,000,000 decline in reported adjusted EBITDA was due to the Augusta Defecture.

Steve: The related impact of lower paperboard volumes and prices.

Steve: and the incremental planned maintenance expense that we called out last quarter.

Steve: which together came in broadly as expected.

Stephen R. Scherger: Excluding those items, and Eva Da Hedwin from Lower Sales, primarily price, and some modest cost in place, was fully offset by SolidNet's performance in order to deliver consistent results. We need to manage all of our sales and cost head... Regardless of which bucket they fall into.

Steve: Excluding those items.

Eva Dahl-Hedwin: and Eva Dahl-Hedwin from Lower Sales, which was primarily price and some modest cost inflation.

Eva Dahl-Hedwin: was fully offset by SolidNet performance.

Stephen Scherger: In order to deliver consistent results, we need to manage all of our sales and cost headwinds, regardless of which bucket they fall into. In both the first and second quarters, we did just that. EBITDA impact from other revenue, excluding Augusta and for an exchange, was a $4 million headwind.

Eva Dahl-Hedwin: in order to deliver consistent results.

Eva Dahl-Hedwin: We need to manage all of our sales and cost headwinds.

Stephen R. Scherger: And in both the first and second quarters, we did just that. Ibada Impact from Other M&A, including Augusta, and Foreign Exchange was a $4 million headcount. Journey Tour Balance Sheet and Liquidity, As long as our debt levels are reasonable, we compare every potential use of capital against the alternative of share repurchase. On the basis of that analysis, we applied $200 million of the Augusta divestiture proceeds to the repurchase of GPK shares during the quarter. We also addressed an upcoming debt maturity. We issued $500 million in senior notes at Treasuries plus 188 basis points, our tightest spread to Treasuries to date.

Eva Dahl-Hedwin: Regardless of which bucket they fall into.

Eva Dahl-Hedwin: And in both the first and second quarters, we did just that.

Eva Dahl-Hedwin: EBITDA impact from other M&A, excluding Augusta, and foreign exchange was a $4 million headwind.

Stephen Scherger: $32 a balance sheet and liquidity. As long as our debt levels are reasonable, we compare every potential use capital against the alternative of share repurchase. On the basis of that analysis, we applied $200 million of the Augusta points, our tightest spread to Treasuries today. We also extended our bank debt to 2029. We currently have no significant debt maturities until 2026. We ended the quarter with net leverage of approximately 2.9 times and expect to end the year at approximately 2.7 times. Our average cost of debt is currently running at 4.6 percent, earning operations and capital investments on slide 11.

Eva Dahl-Hedwin: Turning to our Balance Sheet and Liquidity.

Eva Dahl-Hedwin: As long as our debt levels are reasonable, we compare every potential use of capital against the alternative of share repurchase.

Eva Dahl-Hedwin: On the basis of that analysis, we applied $200 million of the Augusta divestiture proceeds to the repurchase of GPK shares during the quarter.

Eva Dahl-Hedwin: We also addressed upcoming debt maturities.

Eva Dahl-Hedwin: We issued $500 million in senior notes at Treasuries plus 188 basis points, our tightest spread to Treasuries to date.

Stephen R. Scherger: We also extended our bank debt to 2029. We currently have no significant debt maturities until 2026. We ended the quarter with net leverage of approximately 2.9 times, and expect to end the year at approximately 2.7 times. Our average cost of debt is currently running at 4.6%. Turning to Operations and Capital Investments on slide 11. The Augusta Divestiture took place on May 1st.

Eva Dahl-Hedwin: We also extended our bank debt to 2029.

Eva Dahl-Hedwin: We currently have no significant debt maturities until 2026.

Eva Dahl-Hedwin: We ended the quarter with net leverage of approximately 2.9 times and expect to end the year at approximately 2.7 times.

Eva Dahl-Hedwin: Our average cost of debt is currently running at 4.6%.

Eva Dahl-Hedwin: Turning to operations and capital investments on slide 11.

Stephen Scherger: The Augusta Investiture took place on May 1st, and by the end of the second quarter, we completed the re-optimization of our text arcana bleached paperboard manufacturing facility. As you will recall, we sold some open market business that had been produced at Text Arcana, and filled that gap with production we use internally, which had been produced at Augusta prior to the sale. The planning and execution of those transitions has gone smoothly, and as of today, Text Arcana is running full, produced in a mix of paperboard that we need to serve our customers. As Mike noted, Waco is moving ahead very well.

Stephen R. Scherger: And by the end of the second quarter, we completed the re-optimization of our Texarkana Bleached Paperboard Manufacturing Facility. As you will recall, we sold some open market business that had been produced at Texarkana and filled that gap with production we use internally, which had been produced at Augusta prior to the sale, planning, and execution of those transitions. That's going smoothly, and as of today, Texarkana is running full, producing the mix of paperboard that we need to serve our customers.

Eva Dahl-Hedwin: The Augusta Divestiture took place on May 1st.

Eva Dahl-Hedwin: And by the end of the second quarter, we completed the re-optimization of our Texarkana Bleached Paperboard Manufacturing Facility.

Eva Dahl-Hedwin: As you will recall, we sold some open market business that had been produced at Texarkana and filled that gap with production we use internally, which had been produced at Augusta prior to the sale.

Eva Dahl-Hedwin: The planning and execution of those transitions has gone smoothly, and as of today, Texarkana is running full, producing the mix of paperboard that we need to serve our customers.

Stephen R. Scherger: As Mike noted, WACO is moving ahead very well. We have nearly 1,000 contractors on site. The finished goods warehouse is now substantially complete. Pulpers are installed, and the boiler and drum pulper were recently delivered and are ready for installation.

Eva Dahl-Hedwin: As Mike noted, WACO is moving ahead very well.

Stephen Scherger: We have nearly 1,000 contractors on site this month. The finished goods warehouse is now substantially complete. Two pulpers are installed, and the boiler and drum pulper were recently delivered and are ready for installation. We are moving as quickly as we can, Waco, and with the project going very well, we have accelerated spending on equipment. We now expect total capital spending for 2024 to be approximately $1 billion, up from $950 billion. We are on track with our recovered paperboard and recovered paper sourcing plans and continue to expect to achieve incremental EBITDAB of $80 million in each of 2026 and 2027.

Mike: We have nearly 1,000 contractors on site this month.

Mike: The finished goods warehouse is now substantially complete.

Mike: Two pulpers are installed.

Mike: and the Boiler and Drum Pulper were recently delivered and are ready for installation.

Stephen R. Scherger: We are moving as quickly as we can at WACO, and with the project going very well. Accelerated Spending on Equipment. We now expect total capital spending for 2024 to be approximately $1 billion. Oh, from $950 million.

Mike: We are moving as quickly as we can at Waco, and with the project going very well, we have accelerated spending on equipment.

Mike: We now expect total capital spending for 2024 to be approximately $1 billion.

Mike: up from $950 million.

Stephen R. Scherger: We are on track with our recovered paperboard and recovered paper sourcing plans and continue to expect to achieve incremental EBITDA of $80 million in each of 2026 and 2027, a portion of which reflects our plan to shut down two of our older, smaller recycled paperboard manufacturing facilities. After those closures, we will have a total of five paperboard manufacturing facilities in our system, all of which will be modern and well-invested. Mike shared some details on the kinds of projects we are doing in our global packaging network, and those investments are delivering the productivity we targeted. However, the benefits from each of these projects are different.

Mike: We are on track with our recovered paper board and recovered paper sourcing plans and continue to expect to achieve incremental EBITDA of $80 million in each of 2026 and 2027.

Stephen Scherger: A portion of which reflects our plan to shut down two of our older, smaller recycled paperboard manufacturing facilities. After those closures, we will have a total of five paperboard manufacturing facilities in our system. All of which will be modern and well-invested. Mike shares details on the kinds of projects we are doing in our global packaging network, and no investments are delivering the productivity we target. The benefits from each of these projects are different, but what they care in common is a rampant financial payback and expansion of product capabilities for an increase in productivity. Greater reliability, and improved customer service.

Mike: A portion of which reflects our plan to shut down two of our older, smaller recycled paper cord manufacturing facilities.

Mike: After those closures, we will have a total of five paperboard manufacturing facilities in our system, all of which will be modern and well-invested.

Stephen R. Scherger: What they share in common is rapid financial payback, and Expansion of Product Capabilities for an increase in productivity, greater reliability, and Improved Customer Service. These types of projects range from a few million dollars to the low tens of millions of dollars and are included in our plan, 5% of sales, capital spending commitment post WACO. And finally, the Bell Packaging Tuck Under Acquisition, which we completed in September of last year, is now fully integrated, and Target Synergies of approximately $10 million have been achieved.

Mike: Mike shared some details on the kinds of projects we are doing in our global packaging network, and those investments are delivering the productivity we targeted.

Mike: The benefits from each of these projects are different, but what they share in common is a rapid financial payback, an expansion of product capabilities, or an increase of productivity.

Mike: Greater Reliability

Stephen Scherger: These types of projects range from a few million dollars to the low tens of millions of dollars and are included in our plan, 5% of sales, capital spending commitment, post-wake-o. And finally, the Bell Packaging tuck-under acquisition, which we completed in September of last year, is now fully integrated, and target synergies are approximately ten million dollars. Bell has expanded our food service platform in this plenty of room for further volume growth without significant new investment.

Mike: and Improved Customer Service.

Mike: These types of projects range from a few million dollars to the low tens of millions of dollars and are included in our planned 5% of sales capital spending commitment post WACO.

Mike: And finally, the Bell Packaging Tuck Under Acquisition, which we completed in September of last year, is now fully integrated.

Mike: and Target Synergies of approximately $10 million have been achieved.

Stephen R. Scherger: Bell has expanded its food service platform, and there's plenty of room for further volume growth without significant new investment. Slide 12, to summarize our recent dividend and repurchase activity, In the second quarter, we returned approximately $230 million to stockholders through a combination of dividends and share repurchase. For your modeling purposes, we bought back approximately 7.2 million shares, or about 2.4% of our shares outstanding, for a total consideration of $200 million at an average price of $27.61 per share. We ended the quarter with approximately 300 million common shares outstanding, for about 301.2 million shares on a fully diluted basis. Turning to slide 13 in the outline,

Mike: Bell has expanded our food service platform and there's plenty of room for further volume growth without significant new investment.

Stephen Scherger: On flight 12, we summarized our recent dividend and repurchase activity. In the second quarter, we returned approximately 230 million dollars to stockholders through a combination of dividends and share repurchase. We bought back approximately 7.2 million shares for about 2.4% of our shares outstanding for total consideration of 200 million dollars at an average price of $27.61 per share. For your modeling purposes, we entered the quarter with approximately 300 million common shares outstanding for about 301.2 million shares on a fully diluted basis.

Mike: On slide 12, we summarize our recent dividend and repurchase activity.

Mike: In the second quarter, we returned approximately $230 million to stockholders through a combination of dividends and share repurchase.

Mike: We bought back approximately 7.2 million shares, or about 2.4% of our shares outstanding.

Mike: for total consideration of $200 million at an average price of $27.61 per share.

Mike: for your modeling purposes.

Mike: We ended the quarter with approximately 300 million common shares outstanding.

Mike: for about 301.2 million shares on a fully diluted basis.

Stephen Scherger: Turning to slide 13 in the hour, as Mike noted earlier, July is off to an encouraging start in both North America and Europe, and customer engagement is high across all of our markets. We continue to expect 3% to 4% volume growth in the second half, and excluding the impact of the adjusted divestiture, we continue to expect 4-year volume mix to be modest and positive, although current right-hand winds may offset that positive benefit in 2024. We currently expect a return to low-single-digit sales growth in 2025. We are on track to deliver $200 million of innovation sales growth in 2024.

Stephen R. Scherger: As Mike noted earlier, July is off to an encouraging start in both North America and Europe, and customer engagement is high across all of our markets.

Mike: Turning to slide 13 in the outline.

Mike: As Mike noted earlier, July is off to an encouraging start in both North America and Europe .

Speaker Change: and Customer Engagement is high across all of our markets.

Stephen R. Scherger: We continue to expect 3 to 4% volume mix growth in the second half, and excluding the impact of the Augusta divestiture, we continue to expect full-year volume mix to be modestly positive, although current price headwinds may offset that positive benefit in 2024. We currently expect a return to low single-digit sales growth in 2025.

Speaker Change: We continue to expect 3-4% volume mix growth in the second half of the year.

Speaker Change: and excluding the impact of the Augusta divestiture, we continue to expect full year volume mix to be modestly positive.

Speaker Change: Although current price headwinds may offset that positive benefit in 2024.

Speaker Change: We currently expect a return to low single-digit sales growth in 2025.

Stephen R. Scherger: We're on track to deliver $200 million of innovation sales growth in 2024. And, as we indicated last quarter, we expect full-year 2024 adjusted EBITDA margins in the 19 to 20% range and expect to deliver adjusted EBITDA in the range of $1.73 billion to $1.83 billion. Our adjusted EPS guidance also remains unchanged. We indicated last quarter that 2024 would feature a pronounced first-half, second-half pattern that is quite unusual for graphic packaging. After delivering adjusted EBITDA of $845 million in the first half,

Speaker Change: We are on track to deliver $200 million of innovation sales growth in 2024.

Stephen Scherger: And as we indicated last quarter, we expect 4-year 2024 adjusted EBITDA margins in the 19-20% range and expect to deliver adjusted EBITDA in the range of $1.7 trillion to $1.83 billion. Our adjusted EPS guidance also remains unchanged. We indicated last quarter that 2024 would feature a pronounced first half, second half pattern that is quite unusual for growth packaging. After delivering adjusted EBITDA of $845 million in the first half, our 84940 guidance at the midpoint becomes $935 million of adjusted EBITDA for the second half of the year. That translates to a $19 million increase in the second half or the first half.

Speaker Change: And as we indicated last quarter, we expect full year 2024 adjusted EBITDA margins in the 19-20% range and expect to deliver adjusted EBITDA in the range of $1.73 billion to $1.83 billion.

Speaker Change: Our adjusted EPS guidance also remains unchanged.

Speaker Change: We indicated last quarter that 2024 would feature a pronounced first-half, second-half pattern that is quite unusual for graphic packaging.

Speaker Change: After delivering adjusted EBITDA of $845 million dollars in the first half,

Stephen R. Scherger: R840-940 Guidance at the Midpoint becomes $935 million of adjusted EBITDA for the second half of the year. That translates to a $90 million increase in the second half over the first half. Keep in mind that approximately $50 million of that improvement will come from less planned maintenance expenses.

Speaker Change: R840-940 Guidance at the Midpoint

Speaker Change: becomes $935 million of adjusted EBITDA for the second half of the year.

Speaker Change: That translates to a $90 million increase in the second half over the first half.

Stephen Scherger: Keep in mind that approximately $50 million of that improvement will come from less planned payments to expect. The rest, we expect to come from the three to four percent volume mixed growth and reference the moment ago, and a continuation of the very strong execution and net performance we delivered in the first half.

Speaker Change: Keep in mind that approximately $50 million of that improvement will come from less planned maintenance expense.

Stephen R. Scherger: The rest we expect to come from the 3 to 4% volume mix growth I referenced a moment ago and a continuation of the very strong execution and net performance we delivered in the first half. Slide 14 summarizes our Vision 2030, financial metrics, and our capital allocation priorities. Presented at Investor Day in February. Low Single-Digit Top-Line Growth Driven by Innovation and Execution Mid-single-digit Adjusted EBITDA growth, reflecting the leverage in our financial model, as well as the returns we expect from the investment in Waco and the ongoing productivity projects we have in our pipeline.

Speaker Change: The rest we expect to come from the 3-4% volume mix growth I referenced a moment ago, and a continuation of the very strong execution and net performance we delivered in the first half.

Stephen Scherger: Slide 14 summarizes our Vision 2030 financial metrics and our capital allocation priorities, which we presented at the Investor Day in February. Low single digit top wide growth driven by innovation and execution. Mid single digit adjusted EBITDA growth, reflecting the leverage in our financial model, as well as the returns we expect from the investment in Waco and the ongoing productivity projects we have in our five wide. High single-digit EPS growth through the combination of higher pre-tax earnings, lower leverage over time, and the reduced share accounts. Once the Waco recycled paperwork manufacturing investment is complete in late 2025, we will hold capital spending to five percent of the sales, support growth, and drive net performance.

Speaker Change: Slide 14 summarizes our Vision 2030 financial metrics and our capital allocation priorities, which we presented at the Investor Day in February .

Speaker Change: Low Single-Digit Top-Line Growth Driven by Innovation and Execution

Speaker Change: Mid-single-digit adjusted EBITDA growth, reflecting the leverage in our financial model, as well as the returns we expect from the investment in WACO and the ongoing productivity projects we have in our pipeline.

Stephen R. Scherger: High single-digit EPS growth through the combination of higher pre-tax earnings, lower leverage over time, and reducing share cap. Once the Waco recycled paperboard manufacturing investment is complete in late 2025, we will hold capital spending to 5% of sales to support growth and drive net performance. We expect to generate cash flow well in excess of our needs over the next seven years, and our priorities for deploying cash are clear. Once we complete the Waco investment, our capital priorities will focus first on maintaining and strengthening our leadership position in sustainable consumer packaging. After reinvestment, our next highest priority is returning capital to stockholders through a growing dividend and share repurchasing. Every potential use of cash is measured against sheer repertory. This is good, basic financial discipline.

Speaker Change: High single-digit EPS growth through the combination of higher pre-tax earnings, lower leverage over time, and a reduced share cap.

Speaker Change: Once the Waco recycled paperboard manufacturing investment is complete in late 2025, we will hold capital spending to 5% of sales to support growth and drive net performance.

Stephen Scherger: We expect to generate cash flow well and excessive our needs over the next seven years, and our priorities for deploying cash are clear. Once we complete the Waco investment, our capital priorities will focus first on maintaining and strengthening our leadership position and sustainable consumer packaging. After re-investment, our next highest priority is returning capital stockholders through a growing dividend and share repurchase. Every potential use of cash is measured against share repurchase, which is good basic financial discipline. We do plan to reduce leverage over time, but as we have indicated previously, we are comfortable with our current debt levels and satisfied with our maturity schedule and overall cost of debt.

Speaker Change: We expect to generate cash flow well in excess of our needs over the next seven years, and our priorities for deploying cash are clear.

Speaker Change: Once we complete the Waco investment, our capital priorities will focus first on maintaining and strengthening our leadership position in sustainable consumer packaging.

Speaker Change: After reinvestment, our next highest priority is returning capital to stockholders through a growing dividend and share repurchase.

Speaker Change: Every potential use of cash is measured against share repurchase.

Speaker Change: which is good basic financial discipline.

Stephen R. Scherger: We do plan to reduce leverage over time, but as we have indicated previously, we are comfortable with our current debt level, satisfied with our maturity schedule and overall cost of debt. We expect leverage to fall over the next couple of years, and we'll pursue an investment-grade debt rating at the appropriate time. We have the assets, the capabilities, and the team we need to deliver on our Vision 2030 goals. And we will, of course. We will continue to evaluate Tuck Hunter acquisitions where they can accelerate our growth or drive even higher returns. Last year's Bell Acquisition was a good example of that.

Speaker Change: We do plan to reduce leverage over time, but as we have indicated previously, we are comfortable with our current debt levels.

Speaker Change: and satisfied with our maturity schedule and overall cost of debt.

Stephen Scherger: We expect leverage to fall over the next couple of years and will pursue an investment-grade debt rating at the appropriate time. We have the assets, the capabilities, and the team we need to deliver on our Vision 2030 goals. We will, of course, continue to evaluate telekunder acquisitions where they can accelerate our growth for driving on higher returns. Last year's Bell acquisition was a good example of that.

Speaker Change: We expect leverage to fall over the next couple of years and will pursue an investment grade debt rating at the appropriate time.

Speaker Change: We have the assets, the capabilities, and the team we need to deliver on our Vision 2030 goals.

Speaker Change: We will, of course, continue to evaluate Tuck Hunter acquisitions where they can accelerate our growth or drive even higher returns.

Speaker Change: Last year's Bell Acquisition was a good example of that.

Stephen Scherger: Slide 15 is from our Investor-Day presentation. Over the next several years, we expect to generate roughly $5 billion of cash flow, with 2024 being our peak-CathEx year. In 2025, we expect Catholics to be at least $200 million lower than in 2024. And in 2026 and 2027, we expect to see the healthy returns from the wake of investment and generate substantially higher cash flow, which we will deploy to drive further value creation. On slide 17, you will find some supplemental information that may be useful for modeling purposes.

Stephen R. Scherger: Slide 15 is from our Investor Day presentation. Over the next several years, we expect to generate roughly $5 billion of cash flow. 2024 being our peak CapEx year. In 2025, we expect CapEx to be at least $200 million lower than in 2024, and in 2026 and 2027. We expect to see healthy returns from the Waco investment and generate substantially higher cash flow, which we will deploy to drive further value creation. On Flight 17, you will find some supplemental information that may be useful for modeling purposes. That concludes our prepared remarks this morning. I will now turn the call back to the operator to begin Q&A. Operator.

Speaker Change: Slide 15 is from our Investor Day presentation.

Speaker Change: Over the next several years, we expect to generate roughly $5 billion of cash flow.

Speaker Change: with 2024 being our peak CapEx year.

Speaker Change: In 2025, we expect CapEx to be at least $200 million lower than in 2024.

Speaker Change: And in 2026 and 2027, we expect to see the healthy returns from the Waco investment and generate substantially higher cash flow, which we will deploy to drive further value creation.

Speaker Change: On slide 17 you will find some supplemental information that may be useful for modeling purposes.

Operator: That concludes our prepared remarks this morning. We will now turn the call back to the operator to begin Q&A. Operator.

Speaker Change: That concludes our prepared remarks this morning.

Speaker Change: We will now turn the call back to the operator to begin Q&A. Operator?

Operator: Thank you.

Unknown Executive: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in use. You may press star 2 if you would like to remove yourself from the line.

Operator: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove yourself from the queue. We do ask to please limit yourself to one question and one follow-up. If you have any additional questions, you may re-enter the queue by pressing star one. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Speaker Change: You may press star 2 if you would like to remove yourself from the queue.

Unknown Executive: We do ask that you limit yourself to one question and one follow-up. If you have any additional questions, you may re-enter the queue by pressing star 1. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Speaker Change: We do ask to please limit yourself to one question and one follow-up. If you have any additional questions, you may re-enter the queue by pressing star 1. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: One moment, please, while we pull for questions.

Unknown Executive: One moment, please, while we poll for questions. Your first question for today is from George Staphos with Bank of America. Hi, everyone. Good morning.

Speaker Change: One moment, please, while we poll for questions.

George Staphos: Your first question for today is from George Staphos with Bank of America. Hi, everyone. Good morning. Thanks for the details. My two questions.

Speaker Change: Your first question for today is from George Staphos with Bank of America.

George Leon Staphos: My two questions: the first one will be on volume. Talk a bit about what you're seeing. You said July is off to an encouraging start. What are you seeing?

George Leon Staphos: Hi everyone, good morning. Thanks for the details. My two questions, the first one will be on volume and the second one is on margin.

George Staphos: First one will be on volume and the second one is on margin. In terms of volume, gentlemen, can you talk a bit about what you're seeing? You said July is often an encouraging start. What are you seeing early in the quarter, and which end markets are giving you the most confidence in terms of that? Three to four percent adjusted growth rate for the second half of the year. How much is the trend towards more promotion, change commercial strategies, etc. from your customers driving that?

George Leon Staphos: In terms of volume, gentlemen, can you talk a bit about what you're seeing? You said July is off to an encouraging start.

Michael P. Doss: Quarter. And which end markets are giving you the most confidence in terms of that three to four? growth rate for the second half of the year. Relatedly, you know, how much Page PAGE of NUMPAGES www.verbalink.com, Morning, George.

Speaker Change: What are you seeing early in the quarter and which end markets are giving you the most confidence in terms of that?

Speaker Change: 3-4% adjusted growth rate for the second half of the year.

Speaker Change: Relatedly

Speaker Change: You know, how much is...

Speaker Change: The trend towards more promotion, change commercial strategies, etc.

George Staphos: That had a margin question.

Speaker Change: for mere customers.

Speaker Change: Driving that.

George Staphos: Good morning, George. Thanks for that. Look, as July has kind of come in, we've seen continued strength in our European business, for sure. As we talked about in our prepared comments, we saw that every month in the second quarter, and that's carried over into Q3. We also seen encouraging signs in the America's business, specifically on the food business, which as you know is our largest. I caution you it's early, you know, we're one one vendor word, but we like to see so far. I think you coupled that with a number of our large customers who, in the last few weeks, have reported results and they've talked about their desire to increase promotion activity.

Speaker Change: And that had a margin question.

Michael P. Doss: Thanks for that. Look, as July has kind of come in, we've seen continued strength in our European business, for sure. As we talked about in our prepared comments, we saw that every month in the second quarter, and that's carried over into Q3. We also have seen encouraging signs in the Americas business, specifically in the food business, which, as you know, is our largest. Yeah, I caution you, it's early, you know; we're one month into an order, but we'd like to see so far.

Speaker Change: Morning, George. Thanks for that. Look, July has kind of come in. We've seen continued strength in our European business, for sure.

Speaker Change: As we talked about in our prepared comments,

Speaker Change: We saw that every month in the second quarter, and that's carried over into Q3. We also have seen encouraging signs in the Americas business, specifically on the food business, which as you know, is our largest. I caution you, it's early. We're one month into an order, but we'd like to see...

Michael P. Doss: I think you can couple that with a number of our large customers who, in the last few weeks, have reported results, and they've talked about their desire to increase promotional activity. And we're starting to see some of that activity as well. Beverage and food service were very strong for us in the second quarter, and you saw yesterday with McDonald's release that they're going to extend their value meal. So, our confidence level in that 3 to 4% is quite high, given the factors I just outlined. Thanks, Steve.

Speaker Change: I think you couple that with a number of our large customers who in the last few weeks have reported results and they've talked about their desire to increase promotional activity.

Michael Doss: And we're starting to see some of that activity as well. Veterans and food service were very strong for us in the second quarter. And you saw yesterday with McDonald's release, they're going to extend their value meal. So we expect all of that to kind of inform the overall results that we're seeing. And I think the piece that you'll Steve talked about in his prepared comments, again, just reiterate that you look at our back half of the year and compared against 23. 23 was down anywhere between 5 and 6% as you know in Q3 and Q4.

Speaker Change: and we're starting to see some of that activity as well. Beverage and food service were very strong for us in the second quarter and you saw yesterday with McDonald's release they're going to extend their value meal. So we expect all of that to kind of inform...

Speaker Change: You know, the overall results that we're seeing, and I think the...

Speaker Change: [inaudible]

Speaker Change: Again, just to reiterate, as you look at our back half of the year...

Speaker Change: and compared against 23.

Speaker Change: Twenty-three was down anywhere between five and six percent, as you know, in Q3 and Q4. And so what we're saying is we're going to come back three to four percent this year. And if you put our innovation on top of that, it's roughly two percent. So our confidence level in that three to four percent is quite high, given the factors I just outlined.

Michael Doss: And so what we're saying is we're going to come back 3 to 4% this year. And if you put our innovation on top of that, it's roughly 2%. So our confidence level in that 3 to 4%. It's quite high given the factors I just outlined. Thanks, Steve.

Stephen R. Scherger: Thanks, Mike. The second question I had on margin, again, kind of similar, what gives you the confidence at this juncture that you can get to 19 to 20% for the year. Mike, given that you're under 90.

Stephen Scherger: Thanks, Mike. The second question I had on margin, again, kind of similar. What gives you the confidence that this juncture that you can... and get to 19-20% for the year might, given that you're under 19% in the first half. I recognize maintenance was part of that, so you're going to get a sequential pickup there. But what else is driving that, that you can call out? Relatedly, on mix, usually food surface is pretty strong for mix from what I remember, and so it's just curious, along with Europe, if there's anything else in terms of why mix was negative in the first half and why that dissipates.

Speaker Change: Thanks, Steve. Thanks, Mike. The second question I had on margin, again, kind of similar, what gives you the confidence at this juncture that you can get to 19 to 20 percent for the year

Stephen R. Scherger: In the first half, a recognized part of that, so you're going to get a sequential pickup, but what else is driving that that you can call out? Relatedly on Mix. Usually, food service is pretty strong for Mix, from what I remember, and so I was just curious, along with Europe, if there's anything else in terms of why.

Speaker Change: Mike, given that you're under 19% in the first half, I recognize...

Speaker Change: Maintenance was part of that, so you're going to get a sequential pickup there.

Speaker Change: But what else is driving that that you can call out relatedly on?

Speaker Change: Mix, usually food service is pretty strong for Mix from what I remember and so I was just curious along with you if there's anything else in terms of why Mix was negative in the first half and why that dissipates in the second half towards your margin goal. Thank you and good luck in the quarter.

Stephen R. Scherger: Negative in the first half and why that, Second Half Towards Your Margin Goal. Thank you and good luck in the final. Yeah, thanks, George and Steve. Just in terms of the kind of first half and second half, as we shared in the comments, and just provide a little bit of color here for you. $845 million. We did the first half at 19% margins. Midpoint of our guide $935 million in the second half, so plus $90 million first half to second half.

Stephen Scherger: And the second half towards your margin goal. Thank you, and good luck in the quarter.

Stephen Scherger: Yeah, thanks, George. It's Steve, just in terms of the kind of first half, second half, as we shared in the comments, and just provide a little bit of color here for you. $845 million will be put down the first half, 19% margins, midpoint of our guide, 935 million in the second half. So plus 90 million, first half, the second half of 50 million of that is math. We will take $50 million less in planned maintenance expense. The second quarter was very heavy for us, as we articulated, so 50 million of the 90 comes through just less planned maintenance expense.

Stephen R. Scherger: $50 million of that is math; we will take $50 million less in planned maintenance expense. The second quarter was very heavy for us, as we articulated. So $50 million of the $90 million comes through just less planned maintenance expense. The remaining $40 million of improvement is really two things. One, as Mike just mentioned, a return to modest growth, 3% to 4% in the second half compared to the first half. We'll earn money on that appropriately.

Speaker Change: Yeah, thanks George and Steve. Just in terms of the kind of first half, second half as we shared in the comments and

Speaker Change: Just to provide a little bit of color here for you, $845 million to be put down in the first half, 19% margins.

Speaker Change: Midpoint of our guide, $935 million in the second half, so plus $90 million first half to second half.

Speaker Change: A $50 million of that is math. We will take $50 million less.

Stephen R. Scherger: And then overall, we expect net performance to continue to be very strong. We're running our overall system, both at the packaging level, as well as at the paperboard manufacturing level, quite full here in the second half of the year. Last year, as you know, we took quite a bit of market-related downtime to manage supply and demand. And so really, those three things, the $50 million from reduced planned maintenance expense and then the next $40 million from earnings on growth and the ongoing strong performance give us confidence that we'll operate in the 20% range in the second half. And then obviously, right in that 19% to 20% range for the full year. Okay, I'll turn it over.

Speaker Change: In planned maintenance expense, the second quarter was very heavy for us as we articulated.

Speaker Change: So $50 million of the $90 million comes through just less planned maintenance expense.

Stephen Scherger: The remaining 40 million of improvement, really two things. One is Mike just mentioned, a return to modest growth, 3 to 4%. In the second half compared to the first half, we'll earn on that appropriately, and then overall we expect that performance to continue to be very strong. We're running our overall system, both at the packaging level, as well as the paperboard manufacturing level, quite full here in the second half of the year. Last year, as you know, we were taking quite a bit of market-related downtime demand, supply, and demand. And so really those three things, the 50 million from reduced plant maintenance expense, and then the next 40 from earning on the growth and the ongoing strong performance gives us confidence that we'll operate in the 20% range in the second half, and then obviously right in that 19 to 20% range for the full year.

Speaker Change: The remaining $40 million of improvement, really two things. One, as Mike just mentioned,

Mike: Return to Modest Growth, 3-4%.

Mike: In the second half, compared to the first half, we'll earn on that appropriately.

Speaker Change: And then overall, we expect net performance to continue to be very strong. We're running our overall system, both at the packaging level, as well as the paperboard manufacturing level, quite full.

Speaker Change: Here in the second half of the year, last year, as you know, we were taking quite a bit of market-related downtime to manage supply and demand.

Speaker Change: And so really those three things, the $50 million from reduced plant maintenance expense and then the next $40 million from earning on the growth and the ongoing strong performance, gives us confidence that we'll operate.

Speaker Change: In the 20% range in the second half and then obviously right in that 19 to 20% range for the full year

George Staphos: Okay, I'll turn over. Thank you. Thanks, George.

Speaker Change: Okay, I'll turn it over. Thank you.

George Leon Staphos: Thanks, George.

Lewis Merrick: Your next question is from Lewis Merrick with PNB Paribas.

Lewis Merrick: Thanks. Your next question is from Lewis Merrick with PNB Power. Morning, Mike. Morning, Steve.

Speaker Change: Your next question is from Lewis Merrick with PNB Paribas.

Lewis Merrick: Morning Mike, morning Steve, and thanks for taking my questions, if I may. Good to hear the really strong performance in Europe for the innovation sales. I was hoping you could share a bit more detail into how your European operations are performing and how the market is playing out there relative to the US and also maybe bigger picture. How does that business fit in with the overall portfolio? Any colleague could shed down those two points will be appreciated, and they'll go on follow up. Thanks. Yeah, thank you, Lewis. I appreciate the question. You look, we were really pleased to see that, as you heard Steve talk about, over half of our innovation sales were in Europe this year.

Michael P. Doss: And thanks for taking my questions, too, if I may. It's good to hear the really strong performance in Europe for innovation sales. I was hoping you could share a bit more detail on how your European operations are performing and how the market is playing out there relative to the US. And also, maybe, a bigger picture: how does that business fit in with the overall portfolio? Any call you could shed light on those two points would be appreciated.

Lewis Merrick: Morning, Mike. Morning, Steve. And thanks for taking my questions, too, if I may.

Lewis Merrick: Good to hear the really strong performance in Europe for the innovation sales. I was hoping you could share a bit more detail into how your European operations are performing and how the market is playing out there relative to the US.

Lewis Merrick: and also maybe a bigger picture, how does our business fit in with the overall portfolio? Any colleague could shed down those two points would be appreciated and then I've got one follow-up. Thanks.

Michael P. Doss: And then I've got one follow-up. Yeah, thank you, Lewis. I appreciate the question. Look, we were really pleased to see that, as you heard Steve talk about, over half of our innovation sales were in Europe. This year, we've talked a lot in the past about the European consumer being the most sustainable conscious in the world. There's proof, you know, you live in that market. So you know exactly what I'm talking about.

Speaker Change: Yeah, thank you, Lewis. I appreciate the question. Look, we were really pleased...

Speaker Change: to see that, as you heard Steve talk about, over half of our innovation sales

Michael Doss: We talked a lot in the past around the European consumer being the most sustainably conscious in the world. There is a proof. You know, you live in that market, so you know exactly what I'm talking about. You know, from that standpoint it really shows why the acquisition of A&R and the subsequent scaling out of our innovation activities in Europe is so important to our business because we get those trends. We see them early, we capitalize on them and ultimately we have to move them around the globe to other areas where we have operations including our largest market in North America.

Speaker Change: We're in Europe this year. We've talked a lot in the past around the European consumer being the most sustainably conscious in the world.

Speaker Change: There's your proof. You know, you live in that market, so you know exactly what I'm talking about. You know, from that standpoint, it really shows why the acquisition of A&R and the subsequent scaling out of our innovation activities in Europe is so important to our business, because we get those trends, we see them early, we capitalize on them, and ultimately,

Michael P. Doss: From that standpoint, it really shows why the acquisition of A&R and the subsequent scaling out of our innovation activities in Europe are so important to our business, because we get those trends, we see them early, we capitalize on them, and ultimately, we're able to move them around the globe to other areas where we have operations, including our largest market in North America. So that was great. I would tell you our European business is outperforming the broader European market simply because of all the innovation activities we've got in place.

Speaker Change: We're able to move them around the globe to other areas where we have operations, including our largest market in North America.

Michael Doss: So that was great. I would tell you our European businesses outperforming the broader market in Europe simply because of all the innovation activities we've got in place. Our team does a really nice job finding these opportunities. We profile the same very opportunity this earnings call with paper seal shape. You know, we talked a lot about Bordeaux in the past, and they also have a very big business on upgrades and containers that's continuing to grow. So we live our pipeline there and expect to continue to see it grow. I think the other point, and Steve called this out again during his comments, is that Europe is not our biggest business, but it's a real big important part of our ability to deliver consistency and results every month in the second quarter.

Speaker Change: So that was great. I would tell you our European business is outperforming the broader market in Europe simply because of all the innovation activities we've got in place. Our team there is doing a really nice job.

Michael P. Doss: Our team is doing a really nice job finding these opportunities. We profiled the Sainsbury opportunity, this earnings call with a paper seal shape. You know, we've talked a lot about Bordeaux in the past, and they also have a very big business for trays and containers that's continuing to grow. So we like our pipeline there and expect to continue to see it grow. I think the other point, and you know, Steve called this out again during his comments, is that, you know, Europe is not our biggest business, but it was, it's a really big, important part of our ability to deliver consistency and results.

Speaker Change: Finding these opportunities, we profiled the Sainsbury Opportunity, this...

Speaker Change: Bernie's Call with Paper Seal Shape. We've talked a lot about Bordeaux in the past, and they also have a very big business on trays and containers that's continuing to grow. So we like our pipeline there and expect to continue to see it grow. I think the other point, and Steve called this out again during his comments, is that Europe is not our biggest business, but it's a real big, important part of our ability to deliver consistency and results.

Michael P. Doss: Every month in the second quarter, we saw, you know, month on month gains. And so we like seeing that as an important part of our portfolio, and you're going to see us continue to invest there. Thank you.

Michael Doss: We saw, you know, month-on-month gains, and so we'd like to see in that important part of our portfolio, and you're going to see us continue to invest there.

Speaker Change: Every month in the second quarter we saw you know month-on-month gains and so we like seeing that. It's an important part of our full portfolio and you're going to see us continue to invest there.

Lewis Merrick: Thank you.

Stephen R. Scherger: Maybe building just on George's question, can you maybe give us some color on what sort of exit rate for volumes was in June, and has there been any acceleration throughout the quarter? Hey, Lewis and Steve, I think, as we are articulating as the quarter played out, we kind of saw, you know, flat, modest growth; we ended up at flat. And so May, June played out roughly as expected.

George Staphos: I made a building just on George's question. Can you maybe give us some color on what sort of exit rate for volumes were in June and has there been any acceleration throughout the quarter? Thanks.

Speaker Change: Thank you. Maybe building just on George's question, can you maybe give us some colour on what sort of exit rate for volumes were in June , and has there been any acceleration throughout the quarter? Thanks.

Stephen Scherger: Hello, it's Steve. I think as we are articulating, as the quarter played out, we kind of saw flat, modest growth. We ended up at flat and so made June played out roughly as expected. I think importantly, as Mike mentioned, his commentary has ended; might as well July has come in consistent with our guide. So we're pleased with what we're seeing in July, consistent with that. 34% second half volume growth and so July is meeting those expectations and obviously gives us support for those expectations existing for the second half of the year.

Stephen R. Scherger: I think importantly, as Mike mentioned in his commentary and in mine as well, July has come in consistent with our guide. So we're pleased with what we're seeing in July, consistent with that three to 4% second half volume growth. And so July is meeting those expectations and obviously gives us support for those expectations existing for the second half of the year. Any thanks.

Speaker Change: Yeah, Lewis and Steve, I think as we are articulating as the quarter played out, we kind of saw, you know, flat to modest growth, we ended up at flat, and so May-June played out roughly as expected. I think importantly, as Mike

Speaker Change: mentioned in his commentary and in mine as well, July has come in consistent with our guide so we're pleased with what we're seeing in in July consistent with that three to four percent.

Mike: 2nd half volume growth. And so July is meeting those expectations and obviously gives us support for those expectations existing for the 2nd half of the year.

Speaker Change: Many thanks.

Ghansham Panjabi: Your next question for today is from Ghansham Panjabi with Baird. Yeah, hey guys, good morning. On slide five, we have all the end markets nicely broken out: you know, food beverage, et cetera. What drove the outperformance in beverage that you call that is something that was let's do that for two Q and then as you think about the back half of the year, how do you think those arrows trend? At least in color, you know, three Q and four Q across those end markets.

Ghansham Panjabi: Your next question for today is from Ghansham Panjabi with Bayer. Yeah, hey, guys, good morning. On slide five, we have all the end markets nicely broken out, you know, food, beverage, etc. What drove the odd performance in beverage that you call that? That stood out for two cues. And then, as you kind of think about the back half of the year, how do you think those arrows will trend? At least in color.

Speaker Change: Thank you.

Ghansham Panjabi: Your next question for today is from Ghansham Panjabi with Baird.

Ghansham Panjabi: Yeah, hey guys, good morning on slide 5 where you have all the.

Ghansham Panjabi: And Mark, it's nicely broken out, you know, food, beverage, et cetera. What drove the odd performance in beverage that you call that as, you know, something that stood out for 2Q?

Speaker Change: And then as you kind of think about the back half of the year, how do you think those arrows trend, at least in color, you know, 3Q and 4Q across those end markets?

Michael Doss: Yeah, so I'll take the first part, and let's keep handled the second, Ghansham. You know, in our case, you know, beverage again, there's a big part of innovation there that we were able to try new sales and some of the opportunities that were in front of us. And look, it doesn't hurt that you know, the market market was hot in North America. So the man will solid, and we saw a good poll right there. Yeah, Ghansham, I think as you look out and take the three to four percent volume growth, we're articulating. Obviously, that chart includes price as well, so it's a sales view.

Michael P. Doss: Yeah, so I'll take the first part and let Steve handle the second, Ghansham. You know, in our case, beverage, again, there's a big part of innovation there that we were able to drive new sales and some of the opportunities that were in front of us. And look, it doesn't hurt that, you know, the market was hot in North America.

Mark: Yeah, so I'll take the first part and let Steve handle the second Ghansham, you know in our case, you know beverage again There's a big part of innovation there that we were able to drive, you know new sales and some of the opportunities that were in front of us and Look, it doesn't hurt that you know, the market was hot in North America So demand was solid and we saw a good pull through there

Michael P. Doss: So demand was solid, and we saw a good pull through there. Yeah, Ghansham, I think as you look out and take the three to 4% volume growth we're articulating, obviously, that chart includes price as well. So it's a sales view. So we've got a little bit of headwind on the sales side, the 2% that we've articulated. So it's our expectation that the kind of the bottom right arrows, if you will, will turn more green, kind of in that sideways zone, you know, zero to plus two. Obviously, it could even be a little bit higher than that. But keep in mind, it's a sales slide.

Speaker Change: Yeah, Ghansham, I think as you look out and take the 3-4% volume growth we're articulating,

Steve: Obviously, that chart includes price as well, so it's a sales figure.

Stephen Scherger: So we've got a little bit of headwind on the sales side, the two percent that we've articulated. So it's our expectation that the kind of bottom right arrows, if you will, will turn more green, kind of in that sideways zone, you know, zero plus two. Obviously, it could even be a little bit higher than that, but keep in mind it's a sales slide. And so we would expect that those arrows to kind of move nicely; certainly food service beverage. We would expect to continue to see positive, as we mentioned, food got materially better, but still down in the second quarter.

Speaker Change: We've got a little bit of headwind on the sales side, the 2% that we've articulated. So it's our expectation that the kind of bottom right arrows, if you will, will turn more green kind of in that sideways zone, you know, zero to plus two. Obviously, it could even be a little bit higher than that, but keep in mind it's a sales slide.

Stephen R. Scherger: And so we would expect that those arrows to kind of move nicely. Certainly, food service and beverage, we would expect to continue to see positive, as we mentioned, food got materially better, but still down in the second quarter. So that inflection more towards neutral will be important. And then, obviously, household goods and in the health and beauty side, we would expect to see some reasonable inflection. So not everything will move perfectly up at the same time. But I think if you look across the portfolio, we'd expect the arrows to be moving in a positive direction as we kind of embark on Q3, Q4. Okay, great. Thanks for that.

Speaker Change: And so we would expect that those arrows to kind of move nicely. Certainly food service, beverage, we would expect to continue to see positive, as we mentioned.

Speaker Change: Food got materially better, but still down in the second quarter, so that inflection more towards neutral will be.

Stephen Scherger: So that that inflection more towards neutral will be important, and then obviously household goods and health and beauty side, we would expect to see some some reasonable inflection. So not everything will move perfectly up at the same time, but I think if you look across the portfolio, we'd expect the arrows to be moving in a positive direction as we kind of embark on Q three to four.

Speaker Change: Important and then obviously Household Goods and

Speaker Change: In the health and beauty side, we would expect to see some reasonable inflection. So not everything will move perfectly up at the same time, but I think if you look across the portfolio, we'd expect the arrows to be moving in a positive direction as we kind of embark on Q3-Q4.

Ghansham Panjabi: Okay, great. Thanks for that.

Stephen R. Scherger: And then if you can compare and contrast, you know, 2023 versus 2024, you know, 2023, obviously, was impacted by aggressive inventory destocking, and then, you know, Your Unfolded, Consumer Affordability Issues, etc. Is the reason you're not seeing a more pronounced increase in volumes in the context of the InventoryDestockConf, is it just because consumer affordability and weakness have just got worse I mean, look, the consumer is definitely changing some of their buying habits in response to some of the pricing they've seen in the marketplace.

Ghansham Panjabi: And then if you can compare and contrast, you know, 2023 versus 2024. You know, 2023 obviously was impacted by aggressive inventory destocking. as a urine folded consumer affordability issues, et cetera. Is the reason you're not seeing a more pronounced, you know, increase in volumes in context of the InventoryDES.com? Is it just because consumer affordability and weakness has just gotten worse, and so customers are still running at very low inventory levels? How are we thinking about those dynamics? I think you've answered it pretty well. I mean, look, the consumers definitely, you know, changing some of their buying habits in terms of in response to, you know, some of the pricing.

Speaker Change: Okay, great. Thanks for that. And then if you can compare and contrast, you know, 2023 versus 2024.

Speaker Change: You know, 2023 obviously was impacted by aggressive inventory de-stocking, and then, you know, as a...

Speaker Change: Your Unfolded Consumer Affordability Issues, etc. Is the reason you're not seeing a more pronounced, you know, increase in volumes in context of the InventoryAtLeast.com, is it just because consumer affordability and weakness has just gotten?

Speaker Change: worse and so your customers are still running at very low inventory levels? How are we thinking about those dynamics?

Speaker Change: I think you've answered it pretty well. I mean, look, the consumer is definitely changing some of their buying habits in response to some of the pricing they've seen in the marketplace. Having said that, I think the thing that...

Michael Doss: They've seen in the marketplace. Having said that, I think the thing that we continue to make point of here is just our broad base portfolio has a really big reach into a number of different verticals outside of the center of the store. Now, we purposely built that out over the last 10 years. I mean, as a general statement, if you're seeing movement in Nielsen, you know, we're participating in that. We're seeing that in our backlog. So, and that's really the company we worked hard to build. So we're almost agnostic around how that kind of shifts and where it goes.

Stephen R. Scherger: Having said that, I think the thing that we continue to make the point of here is just our broad-based portfolio has a really big reach into a number of different verticals outside of the center of the store. Now, we've purposely built that out over the last 10 years.

Speaker Change: We continue to make the point of here is just our broad-based portfolio has really big reach into a number of different verticals outside of the center of the store. Now we purposely built that out over the last 10 years.

Michael P. Doss: I mean, as a general statement, if you're seeing movement in Nielsen, we're participating in that. We're seeing that in our backlog. And that's really the company we've worked hard to build, so we're almost agnostic around how that kind of shifts and where it goes. And ultimately, we're seeing that play out.

Speaker Change: I mean as a general statement, if you're seeing movement in Nielsen, we're participating in that, we're seeing it in our backlog, so, and that's really the company we've worked hard to build, so we're almost agnostic around how that kind of shifts and where it goes.

Michael Doss: And ultimately, you know, we're seeing that play out. I would agree with your statement that our customers have been pretty cautious around building in the inventors. You know, so that's been a part of it. But overall, we see our backlogs continuing to grow. You know, on the paperboard side, you know, based on the orders we've got on packaging. So, you know, our confidence is, you know, pretty solid here in this 3 to 4 percent inflection on the back after the year's result. Okay, thanks so much.

Speaker Change: and ultimately you know we're seeing that play out. I would agree with your statement that our customers have been pretty cautious around building any inventories.

Michael P. Doss: I would agree with your statement that our customers have been pretty cautious around building any inventories, so that's been a part of it. But overall, we see our backlogs continuing to grow. On the paperboard side, based on the orders we've got on packaging, so our confidence is pretty solid here in this 3% to 4% inflection in the back half of the year as a result. Thanks so much.

Speaker Change: So that's been a part of it, but overall, we see our backlogs continuing to grow, you know, on the paperboard side, you know, based on the orders we've got on packaging. So, you know, our confidence is, you know, pretty solid here in this three to four percent inflection on the back half of the year as a result.

Lars Kjellberg: Yeah. The next question is from Lars Kelberg with Stefel. Thank you for taking my question. I just wanted to get some incremental clarity on the volume component that you're talking about in age 2. Clearly, you have an easy comparable, as you pointed out. So, how should we think about that in sequential terms? I'm also coming back to that.

Speaker Change: Thanks so much.

Speaker Change: The

Lars Kelberg: [inaudible] The next question is from Lars Kelberg on the volume component that you're talking about in H2. Clearly, you have an easy comparison, as you pointed out. So how should we think about that in sequential terms? And also, coming back to that, if you're talking about low single-digit growth in 25, how does that fit in with a potential continuation of, call it, 200 million innovation growth in 25? Any color on that?

Speaker Change: The next question is from Lars Kelberg with Stiefel.

Lars Kelberg: Thank you for taking my question. I just wanted to get some incremental clarity on the volume component that you're talking about in H2. Clearly you have an easy comparable, as you pointed out. So how should we think about that in sequential terms?

Stephen Scherger: If you're talking about a low single-digit growth in 25, how does that fit in with a potential continuation of a call it 200 million innovation growth in 25? Any color on that, and then I will follow up.

Speaker Change: and also coming back to that if you're talking about a low single-digit growth in 25 how does that fit in with a potential continuation of a call it 200 million innovation growth in 25 and any color on that and then I have follow up

Stephen Scherger: Yeah, I'll start, and I can add anything in addition. I think you touched on it. Obviously, we were down five, six percent last year. So, a positive 3 to 4 this year. Really, we view that as an appropriate assumption. Just as Mike said, the consumer is under reasonable pressure. So, it's not really a substantial volume assumption at a true consumer level. We expect some modest return to promotional activities by our customers.

Stephen R. Scherger: And then I have a follow-up. Yeah, Steve, I'll start, and I can add anything. In addition, I think you touched on it. Obviously, we were down five to six percent last year. So a positive three to four this year. Really, we view that as an appropriate assumption.

Speaker Change: Yeah, I'll start and I can add anything in addition. I think you touched on it. Obviously, we were down five, six percent last year, so a positive three to four this year. Really, we view that as an appropriate assumption, just as Mike said, the consumer is under

Speaker Change: Reasonable Pressure, so it's not really a substantial volume assumption at the true consumer level.

Speaker Change: We expect some modest return to promotional activities by our customers.

Stephen Scherger: And then, importantly, in the second half, our innovation engine ends your part of your question for 24 and 25. You know, we'll be at over $100 million of innovation growth in the second half. That alone is a little over 2 percent growth; that's a real stabilizer for that 3 to 4 percent assumption in the second half. Importantly, given the model out in 25, our pipeline of innovation-based projects remains to be very good, fundamentally sound. It's diverse across our portfolio of products and markets. And so we'll continue to see into 25 and beyond, you know, that a couple hundred basis points of growth coming from the innovation engine, which is important for us, just given that that's a real enabler for the low single digit.

Stephen R. Scherger: Just as Mike said, the consumer is under reasonable pressure. So it's not really a substantial volume assumption at the true consumer level. We expect some modest return to promotional activities by our customers. And then importantly, in the second half, our innovation engine, hence your part of your question for 24 and 25, you know, we'll be at over $100 million of innovation growth in the second half. That alone is a little over 2% growth. That's a real stabilizer for that three to 4% assumption in the second half. Importantly, given the model out in 25, our pipeline of innovation-based projects remains to be very good and fundamentally sound.

Speaker Change: And then importantly in the second half, our innovation engine.

Speaker Change: Answer part of your question for 24 and 25.

Speaker Change: You know, we'll be at over $100 million of innovation growth in the second half. That alone is a little over 2%.

Speaker Change: that's a real stabilizer for that 3-4% assumption in the second half. Importantly, given the model out in 25, our pipeline of

Speaker Change: Innovation-based projects remains to be very good, fundamentally sound.

Stephen R. Scherger: It's diverse across our portfolio of products and markets. And so we'll continue to see out into 25 and beyond, you know, that couple 100 basis points of growth coming from the innovation engine, which is important for us just given that that's a real enabler for low single-digit top line growth. And the follow-up is more so on the upstream business. Of course, there's been talks about import penetration for a fairly long period of time.

Speaker Change: It's diverse across our portfolio of products and markets.

Speaker Change: And so we'll continue to see out into 25 and beyond.

Speaker Change: You know, that couple hundred basis points of growth coming from the innovation engine, which is important for us, just given that that's a real enabler for the low single-digit top-line growth.

Stephen Scherger: Top-line growth.

Lars Kjellberg: Gotcha, and the follow-up is more so on the upstream business. Of course, there's been talks about the import penetration for a little impaired time. We're now seeing, of course, your competitors, mainly in Europe, are seeing a surge in wood costs; it's not. So are you seeing any change in their behavior in terms of trying to win business in the US? And generally, how do you see more potentially than a more increasingly domestic market in terms of the paperboard developing for your total business in North America? But potential risk for import penetration has that produced or how to view that?

Speaker Change: Gotcha and the follow-up is more so on the upstream business. Of course there's been talks about the import penetration for a fairly long period of time and we're now seeing of course your competitors mainly in Europe .

Stephen R. Scherger: And we're now seeing, of course, your competitors, mainly in Europe, are seeing surging wood costs, etc. So are you seeing any change in their behavior in terms of trying to win business in the US? And generally, how do you see potentially more increase in the domestic market in terms of the paperboard developing for your total business in North America, but potential risk for import penetration? Has that reduced, or how do you view that? Thank you, Lars.

Speaker Change: Seeing surgeon would cost etc. So are you seeing any change in their behavior in terms of trying to win business in the US?

Speaker Change: and and generally how do you see a more potentially than a more increase in a domestic market in terms of the paper board developing for your total business in North America but potential risk for input penetration has that reduced or how do you view that?

Michael Doss: Thank you, Lars. I appreciate the question. We've talked in the past that there's been imports into the US market of various different grades for some time. We historically, and this is certainly true for 2024, just have not seen much of that in the at-use markets that we've anticipated. It's just not a big factor for us, but having to set that, it has received a fair amount of press.

Michael P. Doss: I appreciate the question. We've talked in the past that there have been imports into the US market of various different grades for some time. Historically, and this is certainly true for 2024, we just have not seen much of that in the end use markets that we participate in. Just not a big factor for us. But having said that, it has received a fair amount of press.

Speaker Change: Thank you, Lars. I appreciate the question. We've talked in the past that there's been imports into the U.S. market of various different grains for some time. We, historically, and this is certainly true for 2024, just have not seen much of that in the end-use markets that we've participated.

Speaker Change: It's just not a big factor for us, but having said that...

Michael P. Doss: And I think maybe it's worthwhile to take a little bit of a step back and talk about where that is really coming from. I mean, in our case, in North America, the dominant place where we would see any imports from would be the Scandinavian countries, not Asia. As an example, or Latin America; it's really pretty limited to the Scandinavian countries.

Michael Doss: And I think maybe it's worthwhile to take a little bit of a step back and talk about where that is really coming from. I mean, in our case, in North America, the prominent place where we would see any imports from would be the Scandinavia countries, not Asia, as an example, or Latin America. It's really pretty limited to Scandinavian countries. And if you really look at the overall cost structure, there has shifted dramatically in the last couple of years with the Russian sanctions that have been put in place by the EU. Roughly 10% of the wood that used to be assumed in Scandinavia now is no longer available because it can't be imported.

Speaker Change: It has received a fair amount of press.

Speaker Change: And I think maybe it's worthwhile to take a little bit of a step back and talk about

Speaker Change: where that is really coming from. I mean, in our case, in North America, the predominant place where we would see any imports from would be the Scandinavia countries, not Asia.

Speaker Change: You know, as an example, or Latin America. It's really pretty limited to Scandinavian countries and

Michael P. Doss: And, you know, if you really look at the overall cost structure there, it's shifted dramatically in the last couple of years with the Russian sanctions that have been put in place by the EU. Roughly 10% of the wood that used to be consumed in Scandinavia is now no longer available. On top of that, in Scandinavian countries, almost another 10% has gone into pellets as opposed to pulp. I shared that with you just by way of background, so if you think about it, almost 20% of the wood that was there a couple of years ago isn't there now; either it's not available, or it's being used for a different purpose.

Speaker Change: You know, if you really look at the overall cost structure there, it's shifted dramatically in the last couple of years with the Russian sanctions that have been put in place by the EU. Roughly 10% of the wood that used to be...

Speaker Change: Consumed in, uh, you know, Scandinavia now is, uh, no longer available because

Michael Doss: On top of that, when Scandinavian countries, almost another 10% has gone into pellets as opposed to pulp. I share that with you just by way of background. So if you think about it, almost 20% of the wood that was there a couple of years ago is there now. It's not available because it's going to use different purposes. As a result, you know, Scandinavian producers of well-crownical business, they've seen their costs go up 40% to 50% over that 24-month period of time on their primary input cost, which is wood. On top of that, you see, you know, container costs continue to escalate.

Speaker Change: On top of that, in the Scandinavian countries, almost another 10% has gone into pellets as opposed to pulp. I shared that with you just by way of background, so if you think about it, almost 20% of the wood that was there a couple years ago is there now.

Speaker Change: Use it either it's not available or it's going to use you for a different purpose.

Michael P. Doss: As a result, Scandinavian producers have well chronicled this; they've seen their costs go up 40% to 50% over that 24 month period of time on their primary input costs, which is wood. On top of that, you see container costs continue to escalate. You put that all together, you're putting your product on the water and trying to sheepdog into a market that's already well supplied, probably isn't a great medium to long term strategy.

Speaker Change: As a result, Scandinavian producers have well chronicled this, they've seen their costs go up 40-50% over that 24 month period of time on their primary input cost, which is wood.

Speaker Change: On top of that, you see, you know, container costs continue to escalate. You put that all together, you're putting your product on the water and trying to achieve an annual market that's already well supplied.

Michael Doss: You put that all together. You're putting your product on the water and trying to achieve any new market that's already well-supplied. You're probably using a great medium to long-term strategy; maybe in the short term, it can work for a little bit, but overall, I'd say that those dynamics probably work against them along those lines.

Michael P. Doss: Maybe in the short term, it can work for a little bit, but overall, I'd say that those dynamics probably work against them along those lines. One of the trade publications talked about how, in addition to being a substitute for SPS, it could also replace coated unbleached paperboard, which you know we're a big producer of.

Speaker Change: It probably isn't a great medium to long term.

Speaker Change: [inaudible]

Michael Doss: One of the trade publications talked about in addition, Penisoft 2, for SPS, could it also replace coated, unleashed paper or which, you know, were a big producer in? That didn't make a lot of sense to me, to be honest. What do you give in, you know, predominance is when you use that grid, of course, it's really around, you know, tear and strength characteristics. And I asked our packaging engineering team, as we've seen any of that application and anything that we do, and they couldn't think of it. So, it's certainly on a list of things we're watching, but it's not very high up on the list of things that we're concerned about.

Speaker Change: One of the trade publications talked about, in addition to being a substitute for SPS, could it also replace coated unbleached paperboard, which you know we're a big producer in. That didn't make a lot of sense to me, to be honest with you, given, you know, predominantly when you use that grade of paper.

Michael P. Doss: That didn't make a lot of sense to me, to be honest with you, given that predominantly when you use that grid, it's really around tear and strength characteristics. I asked our packaging engineering team if they'd seen any application of that in anything that we do, and they couldn't think of it. It's certainly on a list of things we're watching, but it's not very high on the list of things that we're concerned about.

Speaker Change: Of course, he's really around.

Speaker Change: of Tear and Strength Characteristics, and I asked our...

Speaker Change: Packaging Engineering Team, and we've seen any of that application, and anything that we do, and they couldn't think of it. So, it's certainly on the list of things we're watching, but it's not very high up on the list of things that we're concerned about.

Michael Doss: And I'd say it's a more press run on imports today from a cost standpoint, and certainly six months ago. And I would expect that to continue to be the case, so it's very manageable from our point of view.

Michael P. Doss: I'd say there's more pressure on imports today from a cost standpoint than certainly six months ago. I would expect that to continue to be the case, so it's very manageable from our point of view.

Speaker Change: We're putting more pressure on imports today from a cost standpoint than certainly six months ago, and I would expect that to continue to be the case, so it's very manageable from our point of view.

Michael Doss: I'm excellent, thank you.

Speaker Change: That makes sense. Thank you.

Mike Roxland: Your next question for today is from Mike Roxland with Turalist Securities. Thank you, Mike Stephen, Melanie, for taking my questions, and congrats on a good quarter. Just want to start with food service. I'm just wondering if you can help me reconcile the food service with schools that you're showing in the chart of two to five percent versus recent industry stats for two key, which show the mid-sale business decline. You're out performance versus those stats and the innovation customers. Just try to help reconcile what the stats showing versus what you're showing, and that's why it comes to your own bucket business.

Michael Andrew Roxland: Your next question for today is from Mike Roxland with Truist. Thank you Mike, Steve, and Melanie for taking my questions and congrats on a good quarter. I just wanted to start with, you know, food service. I'm just wondering if you could help me reconcile the food service growth that you're showing in the chart of two to 5% versus recent industry ship stats from 2Q, which showed a mid-single business decline. Your outperformance versus those stats and the innovation customer mix, just try to help reconcile what the stats are showing versus what you're showing for that client in your own book. Yeah, Mike, I appreciate the question. It's really two things.

Speaker Change: Your next question for today is from Mike Roxland with Truist Securities.

Michael Andrew Roxland: Thank you, Mike, Steve, and Melanie for taking my questions, and congrats on a good quarter.

Michael Andrew Roxland: Just wanted to start with, you know, food service. I'm just wondering if you could help me reconcile the food service growth that you're showing in the chart of 2 to 5 percent.

Speaker Change: versus recent industry stats from 2Q which show the mid-single digits decline. Is your outperformance versus those stats going to be the innovation, cost, or mix? Just try to help reconcile what the stats are showing versus what you're showing in that client-in-zero book of business.

Michael Doss: Yeah, I'm going to appreciate the question. It's related to things. It's the innovation that we've been driving, as well as our ballot acquisition, that contributed to that. So you was driving our out performance in the marketplace and we'd expect that to continue along those lines. Got it.

Michael P. Doss: It's the innovation that we've been driving as well as our Bell acquisition that contributed to that. So you put those two together, and that's really what's driving our outperformance in the marketplace. And we'd expect that, you know, to continue along those lines.

Speaker Change: Yeah, Mike, I appreciate the question. It's really two things. It's the innovation that we've been driving as well as our ballot acquisition that contributed to that. So you put those two together, and that's really what's driving our outperformance in the marketplace, and we'd expect that to continue along those lines.

Michael P. Doss: And then just on Cupstock, I believe that Susanna is buying some US assets that produce Cupstock. I believe that Cupstock that Susanna is looking to buy is currently a small part of what those assets ultimately do, but it seems to be a focus area, or could be a focus area, with them buying those assets. Any concerns there? Any concerns over the Chick-fil-A business or any future potential business given this new entry? I'm aware of the purchase, the announced purchase; I believe you're talking about Susana's purchase of Pine Bluff milk from Pact of Evergreen.

Michael Doss: And then just on Copstock, I believe that Susano is buying from the US assets that produce Copstock. I believe that Copstock is looking to buy is currently a small part of what those assets ultimately do, but it seems to be a focus area or could be a focus area with them buying those assets. Any concerns over here? The trick-fully business or any future potential business even with new entrants? I'm aware of the purchase, the announced purchase. I believe you're talking about Susano's purchase of the Pine Bluff Mill from Active Evergreen. I'm not knowledgeable, of course, what their long-term plans are for that facility.

Speaker Change: Got it. And then just on Cupstock, I believe that Susana is buying from U.S. assets that produce Cupstock.

Speaker Change: I believe that Tough Stuff is looking to buy is currently a small part of what those assets ultimately do, but it seems to be a focus area, or could be a focus area, with them buying those assets. Any concerns there, any concerns over the Chick-fil-A business or any future potential business given this new entrance?

Speaker Change: I'm aware of the purchase, the announced purchase, I believe you're talking about Susana's purchase of the Pine Bluff Mill from Pact of Evergreen. I'm not knowledgeable of course what their long-term plans are for that facility.

Michael P. Doss: I'm not knowledgeable, of course, what their long-term plans are for that facility. For the most part, that facility has been focused on liquid packaging board, which really tends to be more of a milk carton stock. Having said that, if you think about the implications for graphic packaging, as you heard Steve talk about in our prepared comments, really, with the Augusta sale and the consolidation of our business into our Texarkana milk, we're full. We're making the grades of paper that we need there, including cup and our bleached paper board material.

Michael Doss: For the most part, that facility has been focused on liquid packaging board, which really tends to be more milk cart stock. Having said that, if you think about the implications for graphic packaging that you heard Steve talk about in our prepared comments, really with the Augusta sale and the consolidation of our business into our Tax Arcana mill, we're full. We're making the greatest paper that we need there, including Cuff and our bleached paper board material. So our strategy is working exactly as we expected would, driving high levels of utilization and good ROIC where for our investors based on the greatest paper that we want to make.

Speaker Change: For the most part, that facility has been focused on liquid packaging board, which really tends to be more milk carton stock. Having said that, if you think about the implications for graphic packaging, as you heard Steve talk about in our prepared comments,

Speaker Change: Really, with the Augusta sale and the consolidation of our business into our Texarkana mill, we're full.

Michael P. Doss: Our strategy is working exactly as we expect it would, driving high levels of utilization and good ROIC for our investors based on the grades of paper that we want to make. Again, all that cup stock that we make goes into our own cup facilities. In addition, even if you decide you're going to make a certain grade of paper, you've got to have an outlook, like where you're going to sell that.

Speaker Change: You know, we're making the grades of paper that we need there, including cup and our bleached paperboard material. So our strategy is working, you know, exactly as we expect it would, driving high levels of utilization and, you know, good ROIC where, you know, for our investors, you know, based on the grades of paper that we want to make. So, again, that all that cup stock that we make goes into our own cup facilities. So it's in addition to, you know, even if you decide you're going to make a grade of paper.

Michael Doss: So again, all that Cuff stock that we make goes into our own Cuff facilities. So it's in addition to even if you decide you're going to make great a paper, you've got to have an outlook like where you're going to sell that stuff to. We've got five very well-capitalized Cuff facilities that are integrated well into our tax arcana paper board manufacturing facilities, so our strategy is very different.

Speaker Change: You've got to have an outlook, like where are you going to sell that stuff to? And we've got five very well-capitalized CUP facilities that are integrated well into our Texarkana paperboard manufacturing facility, so our strategy is very different.

Michael Doss: Thank you.

Speaker Change: Got it. Thank you.

Matthew Roberts: The next question is from Matt Roberts with Raymond James.

Michael P. Doss: And we've got five very well-capitalized CUP facilities that are integrated well into our TXARCANIM paperboard manufacturing facility, so our strategy is very different. Got it. Thank you. The next question is from Matt Roberts with Raymond J. Hey, Mike, Steve, Melanie, good morning.

Speaker Change: The next question is from Matt Roberts with Raymond James.

Matthew Roberts: Hey Mike, Steve, Melanie, good morning. Steve, I apologize if I missed this in a response earlier, but the 3 to 4% second half growth is that purely a volume number with mixed neutral and in second half, what are you betting in price following the recently announced? and on that price increase. Is there anything different in the environment now versus February when you took the prior increase?

Matthew Burke Roberts: Um, Steve, I apologize if I missed this in a response earlier, but the three to 4% second half growth, is that purely a volume number with mixed neutral? And in the second half, what are you embedding in price following the recently announced price? Is there anything different in the environment now versus February when you took the prior? Yeah, thanks for that, Matt. I'll start, and Mike can add here as well.

Matthew Burke Roberts: Hey, Mike, Steve, Melanie, good morning. Um, Steve, I apologize if I missed this in a response earlier, but the 3 to 4% second half growth, is that purely a volume number with mixed neutral?

Matthew Burke Roberts: And in second half, what are you embedding in price following the recently announced increase and on that price increase, is there anything different in the environment now versus February when you took the prior increase?

Stephen Scherger: Yeah, thanks for that, Matt. I'll start in my Canada here as well. That three to four percent is a volume assumption. Mix is neutral. We expect mix to be as it's really been pretty modest to neutral overall right now. We've got a little bit of the pricing. Edwin's as we talk. That's kind of running in the two percent range, so modest offset to the three to four percent net volume mix assumption, which cumulatively would make all of that modestly positive. And as your reference, we are executing on price increase moves in the marketplace that we're executing on currently.

Stephen R. Scherger: That three to 4% is a volume assumption, mix is neutral, and we expect mix to be as it's really been pretty modest to neutral. Overall, right now, we've got a little bit of the pricing headwinds as we talk that's kind of running in the 2% range. So a modest offset to the three to 4% net volume mix assumption, which cumulatively would make all that modestly positive. And, as you referenced, we are executing on price increase moves in the marketplace that we're executing on currently. Okay, great. Thank you.

Steve: Yeah, thanks for that, Matt. I'll start and Mike can add here as well. That 3-4% is a volume assumption. Mix is neutral. We expect mix to be, as it's really been, pretty modest to neutral.

Speaker Change: Overall, right now, we've got a little bit of the pricing headwinds as well.

Michael Andrew Roxland: We talked, it's kind of running in the 2% range, so a modest offset to the 3% to 4%.

Michael Andrew Roxland: Net Volume Mix Assumption, which cumulatively would make all of that modestly positive. And as you referenced, we are executing on price increase moves in the marketplace that we're executing on currently.

Matthew Roberts: Okay, great. Thank you. Thank you for the clarification there.

Stephen R. Scherger: Thank you for the clarification there. And then one more clarification for me on the innovation sales target for the second half. How much of that incremental lift is dependent on volumes from newly introduced products versus new products coming to market? on the ladder.

Speaker Change: Okay, great. Thank you. Thank you for the clarification there. And then one more clarification for me on the innovation sales target for second half.

Michael Doss: And then one more clarification for me on the innovation sales target per second half. How much of that is, how much of that incremental that is dependent on volumes from newly introduced products versus new products coming to market. And on the latter point, are there any delays or anything that you could force you to push any timing into 2025, or is that 200 million in 2024 that can pretty solid. Yeah, Matt, at this point in time, it's really solid. Basically, if it's in motion, you know, it's a part of the 200. I'd say there's very little that would be what we'd characterize as something that's not commercial today.

Speaker Change: How much of that incremental lift is dependent on volumes from newly introduced products versus new products coming to market? And on the latter point, are there any delays or anything that you could foresee that could...

Stephen R. Scherger: Are there any delays or anything? Push Any Timing Into 2025, or is that just $200 million in 2024? Yeah, Matt, at this point in time, it's really solid. Basically, if it's in motion, you know, it's a part of the 200. I'd say there's very little that we'd characterize as something that's not commercial today; it may be on the verge of commercial.

Speaker Change: Push any timing into 2025, or is that $200 million in 2024 looking pretty solid?

Stephen R. Scherger: And it's in our outlook for the second half of the year. But that 200 million, we obviously track it every month, is rock solid for the year. Importantly, as we talked earlier, a pipeline to support the next 200 million into 2025 remains robust, with no major moves across the portfolio of projects that we're working on. And I think we remain very positive about how diverse that portfolio of projects remains, both in terms of markets as well as the product portfolio that we're executing. Very good. Thank you again for the colors, Steve.

Speaker Change: Yeah Matt, at this point in time it's really solid. Basically, if it's in motion, you know, it's a part of the 200. I'd say there's very little that would be what we'd characterize as

Michael Doss: It may be on the verge of commercial, and it's in our outlook into the second half of the year, but that 200 million. We obviously track it every month; it is rock solid for the year. Importantly, as we talked earlier, the pipeline to support the next 200 million into 2025 remains robust. No major moves across the portfolio of projects that we're working on. And I think we remain very positive on how diverse that portfolio of projects remains, both in terms of markets as well as the product portfolio that. That we're executing on.

Speaker Change: Something that's not commercial today. It may be on the verge of commercial, and it's in our outlook into the second half of the year, but that's that $200 million.

Speaker Change: We obviously track it every month. It's rock solid for the year. Importantly, as we talked earlier...

Speaker Change: The pipeline to support the next $200 million in 2025 remains robust.

Speaker Change: No major moves across the portfolio of projects that we're working on, and I think

Speaker Change: We remain very positive on how diverse that portfolio of projects remains, both in terms of markets as well as the product portfolio that we're executing on.

Matthew Roberts: Very good. Thank you again for the color.

Matthew Roberts: Thanks, Matt.

Speaker Change: Very good. Thank you again for the color, Steve.

Mark Wyntrob: Your next question for today is from Mark Wyntrob with Seaport Research Partners. Thank you. So just on this second half of sales or volume increases, I should say I'm sorry. I think if we look at your organic sales from last year, they were about one and a half percent lower in the second half than the first half. And so, since you noted that you were about two percent lower in the first half year over year, I assume it's fair to say that the sequential improvement, one cute first half to second half, is pretty similar to the year over year.

Steve: Thanks, Matt.

Mark Adam Weintraub: Your next question for today is from Mark Weintraub with Seaport Research. Thank you. So just on this second half sales or volume increase, I should say, I'm sorry. So I think if we look at your organic sales from last year, they were about one and a half percent lower in the second half than in the first half. And so since you noted that you were about two percent lower in the first half year over year, I assume it's fair to say that the sequential improvement, first half to second half, is pretty similar to the year over year. Maybe it would be slightly more. Is that a fair assumption?

Speaker Change: Your next question for today is from Mark Weintraub with Seaport Research Partners.

Mark Adam Weintraub: Thank you. So just on this second half sales or volume increase, I should say, I'm sorry. So I think if we look at your organic sales from last year, they were about one and a half percent lower in the second half than the first half.

Speaker Change: and so since you noted that you were about 2% lower in the first half year over year, I assume it's fair to say that the sequential improvement, one Q, first half to second half, is pretty similar to the year over year. Maybe it would be slightly more. Is that a fair assumption?

Stephen Scherger: Maybe it would be slightly more. Is that a fair assumption? It would be better, Mark, by following your logic, I think as we mentioned earlier, year over year plus three to four came off of last year's second half, which was kind of minus five six. So it's not even a full recovery of the de-stocking and the headwinds that we experienced last year from a first half to the second half level. Although it is an acceleration in terms of volumetrically, we'll have... of Sequentially First Half, The Second Half, Higher Sales Across the Packaging Platform That Will Support It.

Stephen R. Scherger: It would be better, Mark, if I followed your logic. I think, as we mentioned earlier, year over year, plus three to four came off of last year's second half, which was kind of minus five, six. So it's not even a full recovery from the de-stocking and the headwinds that we experienced last year. But from a first half to a second half level, it is an acceleration in terms of volumetrically

Speaker Change: It would be better, Mark, if I'm following your logic. I think as we mentioned earlier, year over year, plus three to four, came off of last year's

Mark: Second half, which is kind of minus five, six. So it's not even a full recovery of

Mark: The destocking and the headwinds that we experienced last year, from a first half to the second half level, it is an acceleration in terms of volumetrically. We'll have

Stephen R. Scherger: sequentially, first half to second half, higher sales across the packaging platform that will support it. So I think, to your question, it's a positive first half to second half. I think three to four is obviously year over year, coming off of last year's comparison of minus five, six. And I think given the information you provided to us, we can calculate that it is roughly, to be more exact, a three and a half to four and a half percent increase second half versus first half. Is that in the ballpark? That's directionally correct. Yeah. Okay, and then, given that you are, this is sort of a recovery mode.

Mark: sequentially first half to second half higher sales across the packaging platform that will support it. So I think to your question, it's a positive first half to second half. I think the three to four is obviously year over year coming off of last year's comparison of minus five, six.

Stephen Scherger: So I think to your question, it's a positive first half; the second half, I think the three to four is obviously year over year. I mean, also last year's comparison of minus five six. Right. So just to go. And I think given the information you provided to us, we can calculate that it is roughly, to be more exact, the three and a half to four and a half to four. One and a half percent increase; second half versus first half is that in the ballpark. That's directly correct. Yes. Okay.

Speaker Change #100: Right, so just to clarify, and I think given the information you provided to us, we can calculate that it is roughly, to be more exact, a three and a half to four and a half percent increase second half versus first half. Is that in the ballpark?

Speaker Change #101: That's directionally correct, yes.

Stephen Scherger: And then, given that you are, this is sort of a recovery mode, how should we think about incremental margins on the sales increase? I'm sure it's better than your, your underlying normal EBITDA margin. How should we think about that? It is higher market higher than our, you know, 19, 20% obviously because you get good strong absorption across the totality of the platform. So yes, I think if you're doing the math, you're doing, and you're putting value on that three and a half to four percent. You know, if you're in that 25, 30% range, you're getting to the back half that we're talking about.

Speaker Change #102: Okay. And then, given that you are, this is sort of a recovery mode, how should we think about incremental margins on the sales increase? Because I'm sure it's better than your underlying, you know, normal EBITDA margin. How should we think about that?

Stephen R. Scherger: How should we think about the incremental margins on the sales increase? Because I'm sure it's better than your underlying, you know, normal EBITDA margin. How should we think about that? It is higher, Mark.

Stephen R. Scherger: It's higher than our, you know, 19-20% obviously, and because you get good strong absorption across the totality of the platform. So yes, I think if you're doing the math you're doing, and you're putting value on that three and a half to 4%, you know, if you're in that 25-30% range, you're getting to the back half that we're talking about earning on with the incremental, you know, 40 million of EBITDA, first half, second half, https://www.cdc.gov.au, Unbleached, I should say, you know, 400 basis points, you know, sequentially, second quarter to first quarter, backlogs are growing and inventories are down beyond those grades of paper.

Speaker Change #102: It is higher, Mark. It's higher than our, you know, 19, 20 percent, obviously.

Mark: because you get good strong absorption across the totality of the platform. So yes, I think if you're doing the math you're doing and you're putting value on that 3.5% to 4%

Speaker Change #103: You know, if you're in that 25-30% range, you're getting to the back half that we're talking about earning on with the incremental, you know, $40 million of EBITDA. First half, second half, that's

Stephen Scherger: You know, with the incremental, you know, 40 million of EBITDA first half, second half that's supported by the three to four percent in the outgoing performance, including full absorption of our assets.

Speaker Change #103: Supported by the 3-4% and the ongoing performance, including full absorption of our assets.

Stephen Scherger: That's a good question, Mark. I think the other thing you saw this in the data that was released by the year on Friday. You see it in the coated recycled and the uncoated; you know, paperboard coated on, unbleached, I should say, 400 basis points, you know, sequentially. Second word, first word: backlogs are growing and inventories are down. You know, it was great to paper. And really, that's a function of these orders starting to flow back through. And so if you think about the second half we had last year, we took a fair amount of market-related downtime.

Mark: That's a good question, Mark. Mike, I think the other thing, you saw this in the data that was released by the AFPK here on Friday, and you see it in the coated, recycled, and the uncoated, you know, paperboard coated on

Speaker Change #104: Unbleached, I should say.

Speaker Change #105: You know, I have 400 basis points, you know, sequentially, second quarter to first quarter.

Stephen R. Scherger: And really, that's a function of these orders starting to flow back through. And so if you think about the second half we had last year, we took a fair amount of market-related downtime. It was mostly on the bleached, you know, paperboard side, but it also affected these other grades to some degree.

Speaker Change #106: Backlogs are growing and inventories are down.

Speaker Change #107: Unknown Executive, Michael Doss, Unknown Executive, Melanie Skijus, Maggie Bidlingmaier

Stephen Scherger: It was mostly on the bleached, you know, paperboard side, but it also affected these other grades to some degree. And so, as Steve said, now you run steady; you don't incur those costs. So that's got a big positive margin impact.

Speaker Change #107: It was mostly on.

Speaker Change #109: on the bleached paperboard side, but it also affected these other grades to some degree. And so as Steve said, now you run steady, you don't incur those costs. So that's got a big positive margin impact.

Stephen R. Scherger: And so, as Steve said, now you run steady, you don't incur those costs. So that's got a big positive margin. Great. And one last one. Sorry, one last one, hopefully, I'm not burying myself too deep in the weeds here. But also, you don't have Augusta in the second half.

Stephen Scherger: Great. And one last one. William, Mark, go ahead. Sorry, one last one. Hopefully not bearing myself too deep in the weeds here, but so also you don't have a gust in the second half. And I think you'd originally talked about it being 30 to 35 million. And so is that productivity gains that sort of is going to get us that last part to get us to the midpoint potentially? Or is there some other potential lever to be thinking about? No, it really is, Mark, because if you think about it, here are the second half. Texarkana is running absolutely full.

Speaker Change #110: Great. And one last one.

Mark: Go ahead, Mark. Go ahead. Sorry. One last one. Hopefully, I'm not burying myself too deep in the weeds here. Also, you don't have Augusta in the second half, and I think you'd originally talked about it being $30 to $35 million, and so is that productivity gains that sort of is going to get us that last part to get us to the midpoint potentially, or is there some other potential lever to be thinking about?

Stephen R. Scherger: And I think you'd originally talked about it being 30 to 35 million. And so is that productivity gains that sort of going to get us that last part to get us to the midpoint, potentially? Or is there some other potential lever to be thinking about?

Stephen R. Scherger: No, it really is, Mark, because if you think about it, here in the second half, Texarkana is running absolutely full, and we'll earn very well there. And last year, we were taking an exorbitant amount of downtime across the two facilities. So actually, our earnings power on the bleached platform in the second half of the year will look a lot like last year's cumulative second half, where we had two paperboard manufacturing facilities. And that's also one of the big enablers for the 50 million of reduced maintenance expense; a lot of that was taken at Texarkana.

Speaker Change #112: No, it really is, Mark, because if you think about it, here in the second half, Texarkana is running absolutely full, will earn very well.

Stephen Scherger: We'll earn very well there. And last year, we were taking an exhortment of downtime across the two facilities. So actually, our earnings power on the bleached platform in the second half of the year will look a lot like last year's cumulative second half, where we had two paperboard manufacturing facilities. And that's also one of the big enablers for the 50 million reduced maintenance expense. A lot of that was taken at Texarkana. So the bleached. Capabilities, the earnings profile of the business is supported by less maintenance expense, running full of tax arcana, a busy cup business, and obviously supportive of what we're seeing on the recycled paper cordum belief side.

Speaker Change #113: There and last year we were taking an exorbitant amount of...

Speaker Change #111: Down time across the two facilities. So actually our earnings power

Speaker Change #114: On the bleached platform in the second half of the year will look a lot like last year's cumulative second half where we had two paperboard manufacturing facilities.

Speaker Change #111: And that's also one of the big enablers for the $50 million of reduced maintenance expense. A lot of that was taken at Texarkana. So the bleached...

Stephen R. Scherger: So the bleach, Capabilities, the earnings profile of the business is supported by less maintenance expense, running full of Texarkana, a busy cup business, and obviously supportive of what we're seeing on the recycled paperboard down side bleach side. So that overall volume is allowing our system, as we've now defined it, to be running quite full here in the second half of the year, hence generating significant net performance. Super.

Speaker Change #111: Capabilities, the earnings profile of the business.

Speaker Change #111: is supported by less maintenance expense, running full of Texarkana.

Speaker Change #111: A Busy Cup Business

Speaker Change #111: and obviously supportive of what we're seeing on the recycled paperboard down bleach side. So that overall volume is allowing our system as we've now defined it to be running quite full here in the second half of the year, hence generating significant net performance.

Stephen Scherger: So that overall volume is allowing our system, as we've now defined it, to be running quite full here in the second half of the year, hence generating significant net performance.

Stephen Scherger: Super, thank you.

Anthony Pettinari: And for the operator, we'll go in on the 10 minutes or so, given there's some additional questions out there, so go ahead and proceed, please. Certainly, your next question for today is from Anthony Pettinari with City. Good morning.

Stephen R. Scherger: Thank you. For the operator, we'll go another 10 minutes or so, given there are some additional questions out there. So go ahead and proceed, please.

Speaker Change #115: Super, thank you.

Speaker Change #119: For the operator, we'll go another 10 minutes or so, given there's some additional questions out there. So go ahead and proceed, please.

Unknown Executive: Certainly. Your next question for today is from Anthony Pettinari, who says, Good morning. Can you talk about the level of inflation you're currently seeing across your major cost categories? And, I guess directionally, what level of inflation you're kind of assuming for the second half? Yeah, Anthony and Steve, as we've talked kind of cumulatively, we have a relatively modest amount of inflation running through the business. We've got areas where we've got costs moving down, like wood and energy and chemicals and the external paperboards that we acquire to support our business. For example, in Europe, we've got inflation in areas like resin and OCC, logistics, and labor benefits. But it's remained reasonably benign.

Speaker Change #116: Certainly. Your next question for today is from Anthony Pettinari with Citi.

Stephen R. Scherger: We're not making any assumptions for a large movement in those costs in the second half of the year. So it kind of is a steady as you go. Obviously, if we see movement up or down, we'll take that into consideration when we talk about the business. But broadly speaking, if you're talking about historical terms, the little bit of modest price headwinds, as well as a little bit of inflation that's coming through the business, is being offset by, and even labor benefits in place are being offset by the good, strong performance we were just charging about a couple minutes ago. Got it, got it.

Anthony Pettinari: Can you talk about kind of, and I guess, directionally, what level of inflation you're kind of assuming from the second half? Yeah, Anthony and Steve, as we've talked kind of cumulatively, we have a relatively modest amount of inflation running through the business. We've got areas where we've got cost moving down, like wood and energy and chemicals in the external paper boards if we acquire to support our business. For example, in Europe, we've got inflation in areas like resin and OCC, logistics, and labor and benefits, so it's remained reasonably benign. We're not making any assumptions for large movement in those costs in the second half of the year, so it kind of is a steady issue goes.

Anthony James Pettinari: Good morning. Can you talk about kind of the level of inflation you're currently seeing across your major cost categories? And I guess directionally, what level of inflation you're kind of assuming for the second half?

Anthony James Pettinari: Yeah, Anthony, it's Steve. As we've talked, kind of cumulatively...

Anthony James Pettinari: We have a relatively modest amount of inflation running through the business. We've got areas where we've got

Speaker Change #118: Cost moving down like wood and energy and chemicals and the external paperboards that we acquire to support our business, for example, in Europe .

Speaker Change #118: We've got inflation in areas like resin and OCC, logistics and labor benefits. So it's remained reasonably benign. We're not making any assumptions for large

Speaker Change #118: Movement in those costs in the second half of the year. So it kind of is a steady as it goes. Obviously, if we see movement up or down, we'll take that into consideration when we talk about the business. But broadly speaking,

Stephen Scherger: Obviously, if we see movement up or down, we'll take that into consideration when we talk about the business. But broadly speaking, if you're talking historical terms, the little bit of modest price headwinds, as well as a little bit of inflation that's coming through the business, is being offset by any labor and benefits of inflation, is being offset by the good strong performance we were just charging about a couple minutes ago. Got it, got it.

Speaker Change #118: If you're talking historical terms, the little bit of modest price headwinds, as well as a little bit of inflation that's coming through the business is being offset by, and even labor benefits in place, is being offset by the good strong performance we were just chatting about a couple minutes ago.

Michael P. Doss: And then just following up on the price hikes in the North American business, I guess, to the extent you can, can you talk about how those are sort of being accepted? And is it fair to say that the benefit, you know, would show up for you more in 2025? Or, any thoughts on any kind of potential lag there?

Stephen Scherger: And then just falling up on the price hikes in the North American business, I guess to the extent you can, can you talk about how those are sort of being accepted? And is it fair to say that the benefit would show up for you more in 2025, or any thoughts on kind of potential lag there? Yeah, so Anthony, I will confirm that we're actively implementing the price increases on a number of the substrates that we manufacture. I'm not going to talk about forward-looking comments in terms of how those will go, other than to tell you that we're working hard to recover those, implementing those increases.

Speaker Change #120: Got it, got it. And then just following up on the price hikes in the North American business, I guess to the extent you can, can you talk about how those are sort of being accepted? And is it fair to say that the benefit, you know, would show up for you more in 2025? Or, or any thoughts on kind of potential lag there?

Michael P. Doss: Yeah, Anthony, I will confirm that we're actively implementing price increases on a number of the substrates that we manufacture. I'm not going to talk about forward-looking comments in terms of how those will go other than to tell you that we're working hard to recover those increases. As we do, as Steve said, we do have inflation coming into the business, but it's benign now.

Speaker Change #122: Yeah, so it will confirm that we're actively implementing price increases on a number of the substrates that we manufacture.

Speaker Change #121: I'm not going to talk about forward-looking comments in terms of how those will go other than to tell you that we're working hard to recover those.

Stephen Scherger: As we do with PST set, we do have inflation coming into the business; it's benign now, but ultimately we see things like OCC that's at an elevated level. We need to recover those costs in being a position in 2025, as you said, and you know how this works. I mean, we're basically a six-month delay offset or lag, if you will. And so ultimately, the vast majority of the pricing that would be recognized would ultimately show up in 2025 or 2022. Okay, that's helpful.

Speaker Change #121: Implementing those increases. As we do, as Steve said, we do have inflation.

Michael P. Doss: But ultimately, we did see things like OCC that's at an elevated level, we need to recover those costs and be in a position in 2025, as you said, and you know how this works. I mean, we're basically a six month delay, offset, or lag, if you will. And so ultimately, the vast majority of the pricing that would be recognized would ultimately show up in 2025, as you alluded. Okay, that's helpful. I'll turn it over to you.

Steve: Coming into the business, it's benign now, but ultimately we did see things like OCC that's at an elevated level.

Steve: We need to recover those costs and be in a position in 2025 as you said and you know how this works. I mean we're basically

Speaker Change #123: a six-month delay, offset or lag, if you will. And so ultimately, the vast majority of the pricing that would be recognized would ultimately show up in 2020.

Speaker Change #124: 25, as you alluded to.

Stephen Scherger: I'll turn it over.

Arun Viswanathan: The next question is from Arun Viswanathan with RBC Capital Markets. Great, thanks for taking my question. I guess I just wanted to review how you're thinking about Q4. Last year, you had some accelerated or elevated downtime levels. But this here, it seems like you will be exiting maybe in the 460 to 460, 450 to 460, EBITDA range. From there, do you see the likelihood of strong growth? Maybe you talked about one to two percent or low single digit volume growth for next year. Would you be able to leverage that maybe to mid single digits? Is that how we should be thinking about how your EBITDA could potentially grow next year?

Arun Shankar Viswanathan: The next question is from Arun Viswanathan with RBC Capital. Great, thanks for taking my question. I guess I just wanted to review how you're thinking about Q4. Last year, you had some accelerated or elevated downtime levels.

Speaker Change #124: The next question is from Arun Viswanathan with RBC Capital Markets.

Arun Shankar Viswanathan: Thanks for taking my question. I guess I just wanted to review how you're thinking about Q4. Last year you had some accelerated or elevated downtime levels, but this year it seems like you will be exiting maybe in the 450 to 460 EBITDA range.

Michael P. Doss: But this year, it seems like you will be exiting maybe in the 450 to 460 EBITDA range. From there, do you see the likelihood of strong growth? Maybe, you know, you talked about 1 to 2% or low single-digit volume growth for next year. Would you be able to leverage that, maybe, to mid-single digits? Is that how we should be thinking about how your EBITDA could potentially grow next year? So I'm going to break that down into two responses, Arun. Thanks for the question.

Speaker Change #126: From there, do you see the likelihood of strong growth? Maybe, you know, you talked about 1% to 2% or low single-digit volume growth for next year. Would you be able to leverage that maybe to mid-single digits?

Speaker Change #127: Is that how we should be thinking about how your EBITDA could potentially grow next year?

Michael Doss: So I'm going to parse that out into two responses, Arun. Thanks for the question. If you really look at the second half of the year, as I commented on, we expect our paperboard manufacturing facilities to run. We've taken the vast majority of our plan maintenance. As you heard Steve talk about, there was $50 million more from a cost standpoint in the first half than it will be in the second half. And we ultimately need to run those paperboard manufacturing facilities in Q3 and Q4 to make sure that we've got the paperboard we need to continue to service our customers.

Steve: I'm going to parse that out into two responses, Arun. Thanks for the question. If you really look at the second half of this year, as I've commented on, we expect our paperboard manufacturing facilities to run full. We've taken the vast majority of our planned maintenance, as you heard Steve talk about, and it was $50 million more from a cost standpoint in the first half than it will be in the second.

Michael P. Doss: If you really look at the second half of this year, as I've commented on, we expect our paperboard manufacturing facilities to run, you know, full. We've taken the vast majority of our planned maintenance, as you heard Steve talk about, that was $50 million more from a cost standpoint in the first half than it will be in the second half. And we ultimately need to run those paperboard manufacturing facilities, you know, in Q3 and Q4 to make sure that we've got the paperboard we need to continue to service our costs.

Speaker Change #128: We ultimately need to run those paperboard manufacturing facilities in Q3 and Q4 to make sure that we've got the paperboard we need to continue to service our customers.

Michael P. Doss: It's way too early to prognosticate about 2025, and what we are committed to is our vision 2030 that we've rolled out there. You heard Steve talk about those single digits as kind of our focus for 2025. Could it be more? Sure. Could it be less?

Michael Doss: It's way too early to prognosticate about 2025. What we are committed to is our Vision 2030 that we've rolled out there. University talk about low single digits is kind of our focus for 2025. Could it be more? Sure. Could it be less? There's a lot of macro factors out there that ultimately impact that, as you know. But I think we've got pretty good visibility six, nine months out in our business given its consumer index as opposed to industrial index. And as a result of that, your confidence level in our three to four right now going into the second half of the year's high.

Speaker Change #129: It's way too early to prognosticate about 2025, and what we are committed to is our vision

Speaker Change #130: You know 2030 that we've rolled out there. You heard Steve talk about those single digits. It's kind of our focus for 2025 Could it be more? Sure. Could it be less? You know, I mean, there's a lot of macro factors out there that ultimately impact that as you know But I think we've got pretty good visibility six, nine months out in our business given its consumer index as opposed to industrial index and as a result of that, you know, our confidence level in our three to four right now going into You know, the second half of the year is high You know that in Q1 of this year, we were down a little bit, you know, versus the prior year So, you know, you got to factor that into how we'll head into 2025 too in terms of how you look at your modeling But that's how we're

Michael P. Doss: You know, I mean, there's a lot of macro factors out there that ultimately impact that, as you know. But I think we've got pretty good visibility six, nine months out in our business, given its consumer index as opposed to its industrial index. And as a result of that, you know, our confidence level in our three to four right now going into, you know, the second half of the year is high. You know that in Q1 of this year, we were down a little bit versus the prior year. So, you know, you got to factor that into how we'll head into 2025, too, in terms of how you look at your modeling. But that's how we're thinking about it.

Michael Doss: You know that in Q1 of this year, we were down a little bit versus the prior year. So you got back to that, and how we'll head into 2025 to in terms of how you look at your modeling. But that's how we're thinking about it. And of course, we're quite aggressive on trying to make sure that we're capturing all those innovation opportunities that we see out there and continue to stay very focused on our ability to do so.

Speaker Change #130: [inaudible]

Stephen Scherger: Thanks for that, Mike. And then just a quick follow-up. So just wondering how you guys are thinking about cash flow from here. It sounds like, again, you pointed out 800 to billion dollar level maybe in 26. CapEx should be coming down next year. What kind of magnitude of reduction in capEx are expecting from that billion this year. And then, you know, are you seeing any opportunities where you could deploy that cash flow. You know, maybe could something come out of recent transactions, or is it mainly buyback focused. Thanks.

Speaker Change #131: Thanks for that, Mike. And then, just a quick follow-up. So, just wondering how you guys are thinking about cash flow from here. It sounds like, again, you pointed out the $800,000

Speaker Change #132: Billion Dollar Level, maybe in 26.

Speaker Change #133: CapEx should be coming down next year. What kind of magnitude of reduction in CapEx are you expecting from that billion this year?

Speaker Change #134: And then, you know, are you seeing any opportunities where you could deploy that cash flow? You know, maybe could something come out of recent transactions or is it mainly buyback focused? Thanks.

Michael Doss: Yeah, we're now starting Mike and can add on. Yes, we expect cash flow to improve in 2025 because CapEx will step down at least 200 million dollars a year over a year. So really the vision that we laid out for improving cash flow and then obviously 26 of 27 we see all the benefits of the Wayco investment driving towards the kind of various substantial cash flow that we expect to generate over those couple of years. So really, no change at all. It's kind of the direction of Vision 2030 from a cash flow generation and Mike.

Stephen R. Scherger: And of course, we're quite aggressive in trying to make sure that we're capturing all those innovation opportunities that we see out there and continue to stay very focused on our ability to do so. Yeah, Arun, I'll start, and Mike can add on. Yes, we expect cash flow to improve in 2025 because CapEx will step down at least $200 million year over year. So really, the vision that we laid out for improving cash flow, and then obviously, 26 and 27, we see all the benefits of the Waco investment driving towards the kind of very substantial cash flow that we expect to generate over those couple of years. So really, no change at all in kind of the direction of Vision 2030 from a cash flow generation point of view. And Mike, do you want to take this?

Speaker Change #135: Yeah, Arun, I'll start and Mike can add on. Yes, we expect cash flow to improve in 2025 because CapEx will step down at least $200 million year over year. So really the vision that we laid out for improving cash flow and then obviously 26 and 27, we see all the benefits.

Speaker Change #135: of the Waco investment driving towards the kind of very substantial cash flow that we expect to generate over those couple of years. So really no change at all in kind of the direction of Vision 2030 from a cash flow generation. And Mike, you want to take this? Yeah, I think, look, if you look at Vision 2030,

Michael Doss: I think look, if you look at Vision 2030. Arun, we really talked about CAPEX as a percentage of sales. Once we got past week on end of 2026, let's just call it as a baseline year, you know, being, you know, at 5% or below in terms of CAPEX as a percentage of sales, in post week of, you know, in these fair comments, he made the statement, you know, we end up closing the two smaller coated recycled paperboard mills that we've targeted to do as part of that project. We have five very well invested mills. And our ongoing CAPEX requirements for maintenance is around 2%.

Michael P. Doss: Yeah, I think look, if you look at Vision 2030, Rune, we really talked about CapEx as a percentage of sales. Once we got past WACO and into 2026, let's just call it as a baseline year, you know, being, you know, at 5% or below in terms of CapEx as a percentage of sales. And post WACO, you know, in Steve's fair comments, he made the statement, you know, if we end up closing the two smaller coated recycled paperboard mills that we've targeted to do as part of that project, we have five very well invested mills.

Michael Andrew Roxland: Arun, we really talked about CapEx as a percentage of sales once we got past WACO and into 2026, let's just call it as a baseline year, you know, being, you know, at 5% or below in terms of CapEx as a percentage of sales and post-WACO.

Michael Andrew Roxland: You know, in Steve's prepared comments, he made the statement, you know, if we end up closing the two smaller coated recycled paperboard mills that we've targeted to do as part of that project.

Michael P. Doss: And our ongoing CapEx requirements for maintenance is around 2%. I want to repeat that around 2%. And so ultimately, we've got a fair amount of money there to drive the decarbonization that we've outlined as part of our Vision 2030 initiatives, as well as to continue to pursue some of these smaller CapEx projects, like we've profiled a couple of them, in our paired remarks, replacing presses two for one, that's a nice trade, you know, looking at automation activities in our warehousing operations that ultimately reduce the amount of outside warehousing we need, and the labor associated with it, you're going to see us work on those kinds of things.

Speaker Change #136: We have five very well-invested mills, and our ongoing capex requirements for maintenance is around 2%.

Michael Doss: I want to repeat that about 2%. And so ultimately we've got a fair amount of money there to drive the decarbonization that we've outlined as part of our Vision 2030 initiatives, as well as to continue to pursue some of these smaller CAPEX projects like we've profiled a couple of them in our paired remarks, replacing presses to for one. That's a nice trait. You know, looking at automation activities in our warehousing operations that ultimately reduce the amount of warehousing we need and the labor associated with it, you're going to see us work on those kinds of things.

Speaker Change #136: I want to repeat that, around 2%. And so ultimately, we've got a fair amount of money there to drive the decarbonization that we've outlined as part of our Vision 2030 initiatives, as well as to continue to pursue some of these smaller CapEx projects, like we've profiled a couple of them in our prepared remarks.

Speaker Change #136: Replacing presses two for one. That's a nice trait. You know, looking at automation activities in our warehousing

Michael P. Doss: So we really love the positioning we've got, you know, coming out of WACO, both in terms of how our paperboard manufacturing facilities will be positioned, as well as the ongoing cash flow that we'll have to invest in smart projects in the business because our maintenance requirements will be pretty austere. Great, thanks.

Speaker Change #136: Operations that ultimately reduce the amount of outside warehousing we need and the labor associated with it, you're going to see us work on those kind of things. So we really love the positioning we've got, you know, coming out of Waco, both in terms of

Michael Doss: So we really love the positioning we've got. You know, coming on way go both in terms of our paperboard manufacturing facilities will be positioned as well as the ongoing cash flow that we'll have to invest in smart projects in the business because our maintenance requirements will be pretty austere.

Speaker Change #136: How our paperboard manufacturing facilities will be positioned, as well as the ongoing cash flow that we'll have to invest in smart projects in the business, because our maintenance requirements will be pretty austere.

Michael Doss: Great. Thanks.

Unknown Executive: I think we have time for one more question. Your final question for today is from Phil Ng with Jeff. Good morning, Mike, Steve. This is John on behalf of Phil.

Phil Eng: I think we have time for one more question. Your final question for today is from Phil Eng with Jeffries. Good morning, my Steve.

Speaker Change #136: Great, thanks.

Speaker Change #137: I think we have time for one more question.

Speaker Change #138: Your final question for today is from Phil Ng with Jeffreys.

John: Thank you for all the details and squeezing me in here. I just wanted to start off by saying, you know, the price in the quarter was a little bit more negative than I was expecting. Is that all? [inaudible] Also, we were pretty impressed with the productivity that was able to offset that negative price plus the cost inflation in the quarter. Obviously, you're talking about having less economic downtime in the back half and some of the throughput and efficiencies from the converting projects and investments that you've made.

Unknown Executive: This is John on for Phil. Thank you for all the details and squeezing me in here. I just want to start off, you know, the price in the quarter was a little bit more negative than I was expecting. Is that all from the index moves that are just flowing through? Is there anything else that's in there? And then just also we were pretty impressed with the productivity that was able to offset that negative price plus the cost inflation in the quarter. Obviously, you're talking about having less economic downtime in the back half and some of the throughput and efficiencies from the converting projects and investments that you've made.

John: Good morning, Mike, Steve. This is John on for Phil. Thank you for all the details and squeezing me in here. I just wanted to start off, you know, the price in the quarter was a little bit more negative than I was expecting. Is that, is that all?

John: from the index moves that are just flowing through. Is there anything else that's in there? And then just.

John: Also, we were pretty impressed with the productivity that was able to offset that negative price plus.

Speaker Change #140: Unknown Executive, Michael Doss, Mark Connelly, Unknown Executive, Melanie Skijus, Maggie

John: So I would think that the productivity line is probably stepping up a bit and should be more than enough to offset the negative price of about 2% that you noted and maybe some of that ongoing inflation. Is that appropriate, or is there any way to help us quantify how we should think about net productivity in the back half? Yeah, let me take the price piece. I can touch on the performance piece, which we are very pleased with, obviously, in terms of how we're functioning across the platform.

Stephen Scherger: So I would think that the productivity line to be probably stepping up a bit and should be more than enough to offset a negative price of about 2% that you noted and maybe some of that ongoing inflation. Is that appropriate, or is there any way to help us quantify how we should think about that productivity in the back half?

Speaker Change #141: Productivity line to be.

Speaker Change #141: [inaudible]

Speaker Change #142: Negative price of about 2% that you noted, and maybe some of that ongoing inflation. Is that appropriate or is there any way to help us quantify how we should think about net productivity in the back half?

Stephen Scherger: Yeah, let me take the price piece. I can touch on the performance piece, which we are very pleased with. Obviously, it turns out we're actually across the platform. The only thing I'd probably note for you on the pricing, the minus 2%, keep in mind that 1% of that is really a price pass through a reduced pay per board cost in Europe. And so that, for us, is really a pass through. That's half of it. The other half, the 1%, is a little more related to the whole portfolio of prices that we have across the Americas, the models that are out there, etc.

John: The only thing I'd probably note for you on the pricing, the minus 2%, keep in mind that 1% of that is really a price pass through on reduced paperboard costs in Europe. And so that for us is, you know, really a pass through. That's half of it. The other half, the 1%, is a little more related to the whole portfolio of prices that we have across the Americas, the models that are out there, etc.

Speaker Change #144: Yeah, let me take the price piece. I can touch on the performance piece, which we are very pleased with, obviously, in terms of how we're functioning across the platform. The only thing I'd probably note for you on the pricing, the minus 2%, keep in mind that 1% of that is really a price pass-through, a reduced paperboard cost in Europe . And so, that for us is, you know, really a pass-through. That's half of it.

Speaker Change #144: The other half, the 1%, is a little more related to the whole portfolio of prices that we have across the Americas.

Stephen Scherger: So that'd be the only nuance for you because that pass through is relevant because it's really margin neutral for us, and it's half of that price reduction. I'm really proud of the efforts that our team put forth in the first half of this year in terms of overall execution. As I mentioned, we took a lot of our planned downtime. So there's a lot of things we have to move around to support our paperboard manufacturing facilities in that process. So the second half with us running full, you know, and, you know, volumes stepping up a little bit.

Speaker Change #142: The models that are out there, etc. So that'd be the only nuance for you because

Horace: That pass-through is relevant because it's really margin-neutral Horace and it's half.

Stephen R. Scherger: So that'd be the only nuance for you, because that pass-through is relevant because it's really margin neutral for us, and it's half of that price reduction. Mike, do you want to talk about performance? Yeah, look, John, you mentioned it. I'm really proud of the efforts that our team put forth in the first half of this year in terms of overall execution. As I mentioned, we took a lot of our planned downtime, you know, so there's a lot of things we had to move around, you know, to support our paperboard manufacturing facilities during that process of the second half with us running full, you know, and, you know, volumes stepping up a little bit.

Michael Andrew Roxland: of that price reduction. Mike, you want to talk performance? Yeah, look, John , you mentioned it. I'm really proud of the efforts that our team, you know, put forth in the first half of this year in terms of overall execution. As I mentioned, we took a lot of our planned downtime, you know, so there's a lot of things we had to move around.

Stephen R. Scherger: I like the setup, you know; we're going to continue to drive good productivity here in the second half of the year. That's great. And if I could just add one quick clarification, because I appreciate that you've called out the ending share count after reducing the shares by about 2.4%. Are you done with deploying those proceeds from the Augusta mill sale? Or are you still looking to buy back more shares here in the second half?

Speaker Change #145: to support our paperboard manufacturing facilities in that process of the second half with us running full and volumes stepping up a little bit. I like the setup and we're going to continue to drive good productivity here in the second half of the year.

Stephen Scherger: I like the setup. And we're going to continue to drive good productivity here in the second half of the year.

Stephen Scherger: That's great, and if I could just add on one quick clarification, because I appreciate that you're calling out the ending share count after reducing the shares by about 2.4%. Are you done with deploying those proceeds from the Augusta Mill sale, or are you still looking to buy back more shares here in the second half? Yeah, we don't really forecast or embed share repurchase into our guidance or into the go forward. So we'll continue to be, you know, appropriate and measuring everything that we do against share repurchase, but there's not an incremental share repurchase assumed, and we're embedded in our forward statements.

Speaker Change #147: That's great and if I could just add on one quick clarification because I appreciate that you calling out the ending share count after reducing the shares by about 2.4 percent. Are you are you done with

Speaker Change #146: Deploying those proceeds from the Augusta mill sale or are you still looking to buy back more shares here in the second half?

Stephen R. Scherger: Yeah, we don't we don't really forecast or embed share repurchase into our guidance or into the go forward. So we'll continue to be, you know, appropriate and measuring everything that we do against share repurchase, but there's not an incremental share repurchase assumed in or embedded in our forward statement.

Speaker Change #148: Yeah, we don't we don't really forecast or embed share share repurchase into our guidance or into the go forward. So we'll continue to be, you know,

Speaker Change #148: Appropriate in measuring everything that we do against share repurchase, but there's not an incremental share repurchase assumed in or embedded in our forward statements.

Stephen Scherger: All right, that's awful. Thank you very much. Thank you.

Stephen R. Scherger: All right, that's helpful. Thank you very much. Thank you. We have reached the end of the question and answer session, and I will now turn the call over to Mike Doss for closing. Thank you, operator. Thank you everyone for joining us on our call today. I'm proud of the results our team is delivering, excited about our innovation pipeline, and optimistic about our growth outlook. Graphic Packaging is leading the way in sustainable consumer packaging. Vision 2030 is about execution and delivering results across a wide range of economic conditions, and we are demonstrating that we can do that exactly. Thank you and good day. This concludes today's conference.

Speaker Change #149: All right, that's helpful. Thank you very much.

Michael Doss: We have reached the end of the question and answer session, and I will now turn a call over to Mike Doss for closing remarks. Thank you, operator. Thank you, everyone, for joining us on our call today. I'm proud of the results. Our team is delivering excited about our innovation pipeline and optimistic about our growth. Graphic Packaging is leading away in sustainable consumer packaging. Region 2030 is about execution and delivering results across the wide range of economic conditions. And we are demonstrating that we can do that exactly.

Speaker Change #150: Thank you.

Speaker Change #150: We have reached the end of the question and answer session, and I will now turn the call over to Mike Doss for closing remarks.

Michael P. Doss: Thank you operator. Thank you everyone for joining us on our call today. I'm proud of the results our team is delivering, excited about our innovation pipeline, and optimistic about our growth outlook.

Michael P. Doss: Graphic Packaging is leading the way in sustainable consumer packaging. Vision 2030 is about execution and delivering results across a wide range of economic conditions.

Thank you, and good day. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your part.

Michael P. Doss: and we are demonstrating that we can do that exactly. Thank you and good day.

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